August 11, 2008, 6:00 am

How to Find a Good Financial Advisor Part 5

by: The Financial Blogger    Category: Financial Planning,Personal Finance
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Is there that much to say about financial consultant? I mean, 5 posts on the same topic, do we need that much to know how to recognize a decent financial planner? I’m afraid that even 5 posts is not enough to cover this topic. When you think about it; if you are about to leave someone else manage your money, he better be good on every single aspect he touches! In today’s post, I am thinking out loud about which kind of human being can represent the perfect money manager for your personal finance.


He does really care

Everybody in the industry will tell you that they care about their clients and that they work for them and not the company that give them their pay check (or huge commission deposit ;-)). However, some financial advisors do really care. I will not give any statistics as they would only be the translation of my assumptions, but I am convinced that there are a lot of financial consultants doing an amazing job for their client. Unfortunately, you will be able to assess your advisor’s true honesty over time. Tips that don’t pay him (if he is insisting that you must have a will for example, he is not receiving a penny for this advice), special attentions such as a phone call for your birthday and flexibility (in term of time for a meeting) would be good indicators. Since it’s intangible, it is always hard to know who people really are unless you can read other’s people mind!

He will make mistakes

He is a financial consultant, not a superman! The difference between a good and a bad financial advisor is not the number of mistakes or the severity of them. We recognize a good advisor when he does acknowledge that he made a mistake and its pro-activity to resolve the problem. It is obvious that if you write a major complaint against him, he will be the first to acknowledge his mistake. A good consultant will realize his mistake and make sure you are happy with the solution offered before getting to the point of the complaint. He should be straight forward with his clients so they know he is not perfect, but he doesn’t play the BS either.

He offers more than one solution

This is not only a cheap sale trick (even though some people are using this technique to close deals). The reason behind offering more than one solution to your client is to show him/her the difference between two alternatives. This help recognizing the best solution for an individual and the client will more likely understand the full potential of the strategies. A good financial advisor will also show the disadvantages of each financial product he offers in order to be as honest as possible. It is also important that he validates that you are comfortable with his explanation and that you fully understand all the technicalities.

Other post on this series:

How to find a good financial advisor part 1

How to find a good financial advisor part 2

How to find a good financial advisor part 3

How to find a good financial advisor part 4

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Comments

Good read and right on the money. Glad I practice it with my clients.

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[…] good financial advisor should not only be there to do a quick sale but also to provide his clients with solid and […]

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