Traits your financial advisor should possess
Just a few thoughts on some traits I believe a good financial advisor should have. This is not a comprehensive list, but might help when you search for a financial advisor.
- Trustworthiness—it should go without saying, but in this age of Madoff it bears repeating, the foundational trait your advisor should have is trustworthiness. Do you feel you can trust him or her?
- Unbiased—is your financial advisor unbiased and free of conflicts of interest in the recommendations she provides or does she receive greater compensation from one investment over another?
- Listens well—does he listen to you and does he focus on your goals, or does he immediately jump into what he thinks you need?
- Disciplined investment process—does she have a strict process for creating your portfolio and selecting investments, or does she shoot from the hip?
- Financial Plan—does he create an overall financial plan, or at a minimum understand your overall financial picture? If not, why not? An investment portfolio really shouldn’t be in a vacuum.
- Comprehensive—is she looking at all aspects of wealth management including financial position, risk management, tax situation, estate planning and the like?
- Continuous education—does he possess an advanced certification that requires ongoing education? If not, why not?
- Partner—does she work with you as a partner helping you monitor your progress and give you feedback on your financial plan and portfolio?
And finally, who is the custodian of the assets? It should be a well-established firm such as LPL Financial. This provides you as an investor with a greater degree of protection since the advisor does not have direct access to your investments. One of the reasons Madoff was able to get away with his Ponzi scheme was that his own firm was the custodian.
I hope this list helps.
*The opinions in this material are for general information only and are not intended to provide specific advice or recommendation for any individual.