Have you noticed that “ick” feeling when a relationship has completed its purpose but lingers on past its welcome? Sometimes that happens with a financial advisor. People can be unaware of it because we have a whole relationship to money thing that is unaddress and unequivocally taboo in our society (another topic for another day).
Let’s say last night it was mandated that all financial advisors be disconnected from all clients. And today you had to choose, would you go back to the same advisor?
If your answer was not a resounding “YES!” Perhaps it is time for you to choose a different advisor than your _________ did (parent, spouse, past self, friend, co-worker). And that’s okay.
Here are some tell-tale signs that it’s time to look for a new advisor.
Reason 1: You’re saying (or thinking) “I have no idea what they just said”
Your advisor’s main role is to provide clarity to your financial life and help you make smart financial decisions. If you do not understand what they are saying—that’s a THEM problem, not a YOU problem.
Financial services are littered with jargon and acronyms. Remember, you don’t have to use the jargon and lingo. Ask questions and get them answered in your terms, not jargon terms.
You don’t need to know the names of pieces in a wristwatch to know it works. You do know how it impacts your life. Same thing with money.
If your advisor is a good communicator, they can explain through metaphors and whiteboard drawings so you can understand your money within the context of your life. (At Pleasant Wealth, we love a good whiteboard drawing).
Reason 2: You hear yourself thinking “Yeah, but you don’t understand.”
You will get the most out of your engagement with an advisor when you can bring in the thing that’s holding you up from making a financial decision—even if it feels completely outside of the realm of money.
“You don’t understand” may indicate that you are withholding information from your advisor because there is a gap in feeling comfortable in the relationship to put all your cards on the table.
A funky family relationship may be the reason you aren’t getting your estate documents created or signing the beneficiary form. That is a great insight to bring to the advisor.
The emotion that comes up as your advisor tells you to sell the inherited Timken stock where your father had his career for 30 years. Selling the stock makes you feel like you are letting him go again, which is very painful—that’s a good insight to bring to the advisor.
That new exciting venture you’ve been playing out in your head that would completely scrap the plan you are putting in place—dream with your advisor and get the implications on how your money can fund what you want. Sounds like a FUN meeting to me.
Reason 3: Asking about your advisor’s fees results in a non-transparent answer
When an advisor hides from the question about their fees, it indicates that they aren’t able to fully be transparent or authentic with you. That will keep you from getting the most out of your professional engagement together.
Here are some non-transparent answers I’ve heard from prospective clients when we talk about their fees with their current advisor:
- “You shouldn’t worry about my fees, you should just watch the return I’m getting you.” This is a deflection of the question. As if returns are the only measure of value. They aren’t, and also, many advisors can duplicate the returns. Plus, your returns may be diminished by how much the advisor is charging you.
- “Your accounts pay me in varying amounts.” If this is all that’s stated, it is a non-answer answer. While it is likely true, ask for more detail.
- “I get paid when you send me referrals.” Yes, you do, advisor, AND it’s not like our work together is for free or for fun. This is a distraction to the question, pointing you toward marketing for them rather than understanding how your money works.
Reason 4: When your gut tells you to
Like many relationships in life, we outgrow professional engagements or we have new more relevant facts and circumstances that take us down a new pattern of thinking.
Pay attention to if you justifying staying. Some recent examples we’ve heard in the past are
- “My advisor is like a son to me.”
- “My advisor helped us for decades before my husband passed away, I owe it to him to stay. ”
- “I have a relative in the business; if I move advisors to not-my-relative, it’s going to be uncomfortable. I’d rather not rock the boat.”
Each of these is a limiting belief. You don’t owe anyone business because of first dibs, past support, or their feelings. You owe it to yourself to feel good about money and to have the confidence to assert what you need.
Listen especially well when you get a second opinion to confirm that investment allocation or financial planning is off target. If the prospective advisor feels authentic to you not just money-grabbing, there may be a way you have lost boundaries with your advisor.
Reason 5: Meeting an advisor that stirs a new feeling of relief, excitement, or clarity
You have only this one life to live. What is the full expression of your you-ness? It can come forth in a variety of ways – often with some time or money exchange.
You’ve had that moment when you cross paths with someone and there is an unspoken energetic exchange that you can’t deny. You feel yourself drawn to them and in the process, you learn so much about what you want and don’t want. Smart financial decisions come when you know what you want and don’t want.
Remember also that this advisor engagement is often a long-term partnership. In fact, the longer it lasts the brings more value to you. BIG CAVEAT HERE that the assumption is you are not being financially harmed by bad investments, paying too much to Uncle Sam, or misaligned investments to life goals. View the decision as a long-term decision, not a short-term transaction. Is this someone you could see yourself working with for 20 years?
Reason 6: Your advisor is trying to be too “unique” with their investments and it’s harming you
You might not have this financial insight to see if this is an issue for you until you get a second opinion with a varying opinion on your portfolio. Every advisor has their way of doing investments and nobody really wants to be too cookie-cutter. Unique happens, unique can be good – but we’re really referencing the over-emphasis on a fear-driven strategy.
Occasionally, we have run into portfolios created by advisors that have an extreme fear-driven approach. “The stock market is too scary” so a client has too much of their portfolio locked up in annuities, real estate investment trusts, or is overly exposed to commodity-oriented investments.
It creates the following issues:
- By focusing on the worst-case scenario, the portfolio captures almost none of the more prevalent upward stock market trends that outweigh the negative short-term moments. (not enough oomph in a portfolio)
- Surrender charges on large portions of the portfolio (not good for retirement income)
- High expenses (not good for long-term returns)
- Lower returns (not a good exchange of value)
- In the case of commodities, high volatility without the return to match it (inefficient)
Is it time to take action?
If the reasons above are landing for you and you see your current advisor relationship isn’t working on all four cylinders, We invite you to reach out to us for a second opinion. What if you were excited to see your advisor instead of dreading it?
About the Author
Liz Hand, CFP®, is a financial advisor and a trained Life Coach who focuses on serving women closing in on retirement or women who are already retired. With a knack for retirement income design and women’s finances, Liz shares complex financial ideas in practical terms.
Involved in the community in various capacities, she is on the board of Women’s Impact and involved as the youth sponsor at First Mennonite Church in Canton. Liz and her husband, Nate, enjoy raising their sons, Mason & Brennan. A weekend with free time finds them enjoying downtown Canton eats & events, camping, and dreaming of getting to more National Parks (a family goal to visit them all).
