Financial Planning

3 Mistakes to Avoid When Working with a Financial Adviser

Keep these three don'ts in mind when you meet with your financial professional.

Have you been burned when working with a financial adviser?

High fees, poor communication and a one-size-fits-all approach are common complaints heard from the dissatisfied clients of some advisers. Mistakes made working with the wrong adviser can be stressful and cost you both time and money.

It’s far easier to avoid making a mistake in the first place than to try to fix one after it’s been made. So, as you work with a financial adviser, here are three big things not to do:

1. Believe everything an adviser says.

You should never enter into an important relationship (such as the one you have with a financial adviser) without a high level of trust. If you suspect that your adviser might not have your best interests at heart, don’t stick with them one more minute.

Even if you have a strong relationship of trust, it is not, however, permission for you to check your brain at the door. Your adviser should be part coach and part teacher. They should not only help you do the right things financially, but be able to communicate the reason why they are advising these things.

Ask good questions. And if the answer comes back wrapped in technical jargon, ask for clarification. Don’t be satisfied with a foggy, vague answer. Work with your adviser to understand why you are being asked to do certain things. It’s not too much to ask.

2. Believe nothing an adviser says.

Once you’ve been burned (or at least disappointed), it may be a long time before you trust someone again. While that is understandable, it is not profitable. If you keep your adviser at arm’s length, never fully trusting him, your relationship will not produce the results you both want and need.

No adviser is perfect, but many are competent and trustworthy. Keep searching until you find one who seems to be a good fit for you.

3. Forget the difference between delegation and abdication to your adviser.

By my own, totally unscientific, estimate, the portion of the population who have the time, talent and temperament to do their own financial planning falls somewhere between 5% and 10%. Everyone else, in my humble opinion, could benefit from outside professional advice.

What you are getting from any professional relationship, however, is assistance — not replacement. I know of an adviser who tells prospective new clients, “I don’t want to care more about your financial situation than you do.”

When you hire a financial adviser, you are really delegating certain functions of your financial life to that person. You have made the decision that it is worth the money to buy a portion of their time, talent and temperament to assist you in achieving your financial goals. But never forget: It’s your money and your life. Ultimately, you will reap the benefits or suffer the consequences for what happens.

You know you have crossed the line between delegation and abdication when you choose to never think about what’s going on with your money or choose not to meet with your adviser to find out. Please don’t do that. Stay in touch and stay informed.

Like it or not, your financial future is advancing toward you one day at a time. If you are one of the many who could benefit by getting professional help in preparing for that future, don’t give up. The search for the right adviser for you is worth it.

Argent Advisors Inc. is an SEC registered investment adviser. A copy of our current written disclosure statement discussing our advisory services and fees is available upon request. Please see important disclosure information here.

About the Author

Byron R. Moore, Managing Director, Planning Group

Certified Financial Planner, Argent Financial Group

Byron Moore, Managing Director, Planning Group, Argent Financial Group, helps clients protect, grow and enjoy their wealth by designing and implementing financial strategies that coordinate and balance a client's resources. His financial columns are syndicated in five Gannett newspapers in Louisiana. Byron has been a Certified Financial Planner® practitioner since 1991. He and his wife, Melinda, have four children. They are why he smiles a lot.

Most Popular

Senate Passes $3,000 Child Tax Credit for 2021
Coronavirus and Your Money

Senate Passes $3,000 Child Tax Credit for 2021

The provision would temporarily increase the child tax credit to $3,000 or $3,600 per child for most families and have 50% of it paid in advance by th…
March 6, 2021
Senate Passes Bill with More "Targeted" Stimulus Payments
Coronavirus and Your Money

Senate Passes Bill with More "Targeted" Stimulus Payments

The Senate finally passes the $1.9 trillion COVID-relief bill. But fewer people will get a third stimulus check under the Senate version than under th…
March 6, 2021
Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021

Recommended

Are You Going to Run Out of Money in Retirement?
retirement planning

Are You Going to Run Out of Money in Retirement?

A portfolio stress test can help give you some peace of mind about that … but if you’re not careful, it could give you a false sense of security. To g…
March 8, 2021
The Cost of Retirement Has Tripled! But a New Way of Planning Can Help
retirement planning

The Cost of Retirement Has Tripled! But a New Way of Planning Can Help

With today’s low interest rates and paltry dividends, the old way of saving for your retirement and living off your dividends and income to preserve y…
March 5, 2021
The Basics of Required Minimum Distributions: 12 Things You Must Know About RMDs
Financial Planning

The Basics of Required Minimum Distributions: 12 Things You Must Know About RMDs

Retirement savers who are 72 must start withdrawing funds from tax-advantaged retirement accounts. Here’s what you need to know about required minimum…
March 4, 2021
A COVID Storm Hits Senior Living
Coronavirus and Your Money

A COVID Storm Hits Senior Living

The pandemic has created significant challenges for all types of senior living communities. Because of that, it's more important than ever to review a…
March 3, 2021