How will you find a new financial advisor?

How will you find a new financial advisor?

Bill Harris WH Cornerstone Investments

When it comes to making a change with your financial advisor, chances are you may be forced to make a change at some point in time.

 

Forty-three percent of financial advisors are over age 55. The Certified Financial Planner Board of Standards Inc., which includes 77,000 CFP certificants, states there are more CFPs are over age 70 than under age 30.

As humans, we loathe change. Quitting smoking, giving up sweets, you name it. Habits are hard to break. But, often we are forced to make changes. Choosing a doctor, a barber, dentist or landscaper causes us all to pause. When it comes to making a change with your financial advisor, chances are you may be forced to make a change at some point in time.

In rough terms, financial advisors are aging out. Chances are you may need to find a new one. In some cases, your advisor might sell out; or, your account may be handed-off to the new guy; or, your current advisor’s son or daughter may take over. In most cases, “little Johnny” is rarely a chip off the old block.

Good advising comes from years of experience. If a change of advisor is forced upon you, don’t settle. Go on the offensive and make sure you have the right advisor working for you.

Ask your current advisor for their continuity and succession plan. A continuity plan describes what happens when an advisor becomes ill or disabled. Succession plans are used in cases of retirement or death, when the advisor is leaving the profession.

Many advisors have a successor already identified. In that case, ask to meet with this person before your advisor’s exit from the industry. Make sure their personality is a good match and that their philosophy lines up with yours.

Choosing a financial advisor is as important as choosing a doctor or lawyer; it’s a very personal relationship. Many professionals specialize in working with certain types of clients, such as small-business owners, women, or retirees. Some specialize in certain areas of planning such as retirement, widowhood or divorce situations. Interview at least three professionals to hone in on the right one for you.

Here are some things to consider:

  • Look for a financial adviser who is a Certified Financial Planner (CFP). You can search here.
  • Read the code of ethics to which your potential new advisor adheres. Look for the word “fiduciary” in the language. Fiduciary means the advisor has pledged to act in your best interests at all times. Advisors who aren’t fiduciaries are held to a lower standard, called the suitability standard. Suitability means choices have to be suitable, but not the best.
  • Understand how they will charge you and/or how they make money and the difference between commission-based vs. fee-only advisors.
  • Run background checks on your planner. The SEC protects investors and shares information about investment professionals to help investors make informed decisions. Go digging for info at SEC.gov or at BrokerCheck on FINRA.org.

If we can be of assistance to you, please reach out. We’d love to meet you.

Helping widows rebuild their lives after the loss of a spouse. Love practicing yoga & golf. A connector. Strive to live by the Girl Scout Promise & Law.