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:
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
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.
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.
-
Stock Market Today: Stocks Close Lower as Tech Shares Slump
Weakness in several Magnificent 7 stocks created headwinds for the main indexes Friday.
By Karee Venema Published
-
Find Best Flight Deals With Free American Express Tool Point.me
Point.me tool compares flights on different loyalty programs. The service typically costs $129 annually and is provided free to American Express customers.
By Ellen Kennedy Published
-
Want to Retire Abroad? Five Things to Know About Your Money
To prevent your retirement dream from becoming a nightmare, you should carefully consider the logistical and financial hurdles of retiring outside the U.S.
By Pam Krueger Published
-
For Longevity Protection, Consider a QLAC
A qualifying longevity annuity contract, or QLAC, can help you define a better retirement for yourself by providing guaranteed lifetime income.
By Jerry Golden, Investment Adviser Representative Published
-
Digital Estate Planning Guide: Get Your Digital Assets in Order
A digital estate plan lets your loved ones know what should happen to your email and social media accounts, photos and more after you’re gone.
By Justin Stivers, Esq. Published
-
10 Good Reasons to Revisit Your Will
Life changes often, so taking a good look at your will every three to five years can ensure everything from beneficiaries to changes in the law are up to date.
By Stefan Greenberg, CFP®, CFS, CLTC Published
-
What to Do When You Have More Retirement Income Than You Need
These three options can help you allocate extra income in ways that don’t push you into a higher tax bracket or trigger extra taxes.
By Stephen B. Dunbar III, JD, CLU Published
-
Opportunity Zone Investing Still Hot Despite Looming Sunset
Tax incentives and rise of niche fund strategies make the qualified opportunity zone program an attractive way to grow tax-free wealth.
By Daniel Goodwin Published
-
How Tax-Loss Harvesting Helps to Lower Your Tax Bill
This fairly straightforward tax strategy may help you reduce your capital gains taxes, but beware of triggering the wash sale rule.
By Adam Frank Published
-
Is Investing in Mutual Funds Worth It?
It's important to ensure that your funds are truly diversified and not simply duplicates of other funds. Plus, distributions can cause trouble.
By Alex Astin, MBA, CEP®, IAR Published