How should you evaluate your financial adviser’s performance?

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Once you have chosen a financial adviser, here are some signs that confirm you’ve made a good choice – or conversely, that it’s time to find a new adviser.

Our team has posted about this topic before (for example, here and here), but I was recently asked this question again by someone new to the financial planning services industry, so I thought it might be helpful to pull our team’s thoughts into a single list.

If you have established a relationship with a financial adviser, here are some signs that confirm you’ve made a good choice – or conversely, that it’s time to start looking for someone new.

  1. The right adviser really listens to you. The wrong adviser talks to hear him- or herself talk, whereas the right adviser is always checking in to be sure the information being shared is understood.
  2. The wrong adviser dismisses your questions. ‘Just trust me’ isn’t an answer to a client question. The right adviser is always able and willing to explain why she is recommending something and what that means for you, specifically.
  3. The wrong adviser is condescending to you. Few of us have a perfect financial history, and no one benefits from being berated for past financial mistakes. The right adviser will start wherever you are and help you build from there, step by step. Your meeting with your financial adviser should leave you feeling empowered, not discouraged!
  4. The wrong adviser is a poor communicator. If you’re continually walking away from a session with an adviser thinking ‘I have no idea what she just said,’ it’s time to find a new adviser. The right adviser is able and willing to explain something in as many different ways as necessary for you to ‘get it.’
  5. The wrong advisor is only interested in what assets you bring to the table. The right adviser is looking at your entire life picture and is interested in your overall well-being, not just your net worth.
  6. If you don’t trust your adviser enough to tell her everything about your financial picture, then she or he is the wrong adviser. If you don’t feel you can tell your adviser everything, it’s time for a replacement. The best planning relationship is just that—a relationship between the client and the advisor. Listen to your instincts. Without trust and open communication, any financial advice you receive will be flawed or incomplete, at best.
  7. The wrong adviser is continually trying to ‘educate’ you about finance. Chances are, you don’t need to become a financial expert to reach your financial goals. An adviser who is constantly trying to ‘teach’ you may be emphasizing his or her own ego at the expense of helping you make progress on your goals. Find an adviser who breaks your financial plan down into manageable steps and then gives you the tools and information you need to implement them.

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