Ten traits of successful financial advisors
Nearly two-thirds of Canadians consider themselves informed about investing, yet still rely heavily on their financial advisor when making important investment decisions. And when determining what to invest in, 78% say they're more likely to rely on their advisor's knowledge than their own.
Choosing a trusted and knowledgeable financial advisor is one of the most important investment decisions you'll make. So what makes a great advisor? Here's a "top 10" list of what to look for:
They have a good reputation.
Getting a strong referral from a friend or family member can be the first step in finding the right financial advisor. Consider the background and reputation of the company the advisor works for. Are they local? Do they have a strong track record of success? Be wary of hot-shot planners who seem to be too good to be true – they usually are.
They take a proactive approach.
Good advisors keep the lines of communication open, updating you on current financial issues and opportunities. They help make complex financial concepts easy to understand. A financial advisor that withholds information or doesn't take the time to clearly explain his or her recommendations is not worth your time (or money).
They don't panic.
Finding an advisor who is patient and doesn't panic is critical to success. You want a planner who is always evaluating what options are best for you, but does not divert from a well thought-out strategic plan. Avoid advisors who are constantly pumping the latest hot stock pick with a sense of urgency; they may not have your best interest at heart. There should be no sense of urgency when it comes to sound investing that leads to long-term growth.
They invoke confidence and trust.
You need a financial advisor you can trust to have confidence in their recommendations. If you feel nervous, fearful or stressed out after discussions with your advisor, trust your instincts and end the relationship.
They are an experienced financial professional.
All legitimate financial advisors should have significant experience in the financial services industry or some sort of industry-recognized certification. One highly regarded designation is that of Certified Financial Planner (CFP), awarded in Canada by the Financial Planners Standards Council. CFP professionals must meet standards for experience and ethics, as well complete 30 hours of continuing education every year to maintain this accreditation. Other respected forms of certification include the Canadian Investment Manager (CIM), Financial Management Advisor (FMA), and Personal Financial Planner (PFP) designations. Whatever the case, be sure to verify your advisor's experience and credentials. Do your due diligence; it's your best protection to ensure you're dealing with a reputable advisor.
They take a holistic view of your finances.
Sound financial advice is based on more than just your income level or the types of asset classes you invest in. A good financial advisor will take the time to learn about your full financial situation, investigating your banking, investment, insurance and credit needs. Only by understanding your spending habits, debt obligations, life goals and more can a financial advisor begin to develop a meaningful and accurate strategy.
They have a support team.
A good advisor should have access to a broad range of experts to meet your specific needs. A team approach will ensure that you get the professional advice you require to meet any specialized investment, wealth management, insurance or debt management objectives.
They have a clear strategy.
Just as you wouldn't take a trip across the country without a map, you shouldn't try to steer your financial future without a clear direction. And if life circumstances change, as they often do, your advisor should take them under consideration and help you revise your financial plan.
They work with you.
A good financial advisor will meet with you – and your significant others – regularly throughout the year. And that level of attention should continue every year of your relationship. Too many times, people meet with an advisor, develop a plan, and then simply get statements in the mail.
They put your interests first.
Professional advisors tailor your plan to meet your goals. They don't push products on you simply to meet quota or to get the biggest commission. Check whether your advisor represents a wide range of products and service options or if they're restricted to only proprietary solutions their company sells.
Do you have a professional financial advisor? If not, one of BlueShore Financial's financial advisors would be delighted to meet with you to discuss their financial planning approach, which includes our unique lifespring® assessment and planning process.