I’m a lucky man... marking 25 years of marriage to the lovely Augusta. I’ve never had any need for dating or matchmaking apps, but through the osmosis of being around younger people, I’ve been able to pickup the terminology of “swipe left” or “swipe right.” For those of you of my vintage, when on some of these dating apps, if you swipe right, you’re “interested.” If you swipe left, you have other, better options.
Consumers in general need to do a better job of “swiping left” on their advisor.
Most people spend more time planning their next vacation than they spend on interviewing and vetting their next financial advisor. Your financial advisor is the person who will advise you for many years, who will help determine when you can retire and what that retirement will feel like financially. When you die, one of your family’s first calls will be to that advisor and hopefully the advisor can help your family work their way through all the issues associated with death and succession. Take your time, interview 2 or 3 advisors, ask for references, do your homework.
Part of that homework should include “Broker Check.” (https://brokercheck.finra.org/) This is the easy way to do an initial screen on any advisor you’re thinking of employing. On this site, you can enter the name of any advisor or firm and get real-time information on any infractions or complaints they’ve had over the years. You can also see his/her experience, licenses, and the states where he/she can do business. There is one prominent advisor in town who has a “rap sheet” of fines and suspensions that would give anyone reason for concern, and all the information is right there on Broker Check.
Your goal should be a fiduciary advisor (preferably a CFP) who looks at your situation holistically. You want someone to not just be an investment manager, but someone who can help you with risk management as well. You want someone who will listen to you and give you the time necessary to understand the various layers of your financial plan. You want someone who will be a good fit for your spouse and eventually your kids.
One other piece of advice, don’t be afraid to discuss fees. 9 out of 10 people can not answer the question “How much are you paying your advisor?” Is there any other area of your life where you employ someone for thousands of dollars a year… but you have no idea how much? In the case of some firms, it’s hard to know what you are paying. It’s almost impossible to find it on your quarterly statement. Don’t be afraid to ask your advisor the following questions: “What am I paying you?” “Do you get compensation from any of the investments you put me in?” “What is my return, net of all fees?” (At GBB, your fee is very visible on the first page of your quarterly report. We accept no compensation from any of the funds we use because that would undercut our independence.) It is up to you to demand transparency.
In general, inertia can be a powerful force. Don’t be afraid to interview other advisors if you are dissatisfied with the service you are receiving. You’re not being disloyal. You are simply finding the very best fit for you and your family. You are a fiduciary for your family’s wealth… act like it! If you are being underserved, “swipe left.” There are better options out there. Feel free to give one of our advisors a call at (916) 269-0671.