Your finances aren’t just a series of figures in your accounts — they’re the key to living the life you envision, whether that means enjoying a leisurely retirement, purchasing a vacation home, or starting a small business. Needless to say, you don’t want just anybody in charge of your personal financial strategy. You want an experienced, qualified, and trustworthy individual with the expertise needed to serve as a trusted consultant.
If you’re wondering what to look for in a financial advisor specifically, we’re here to help. Over the years, we’ve identified a few of the most important characteristics of a financial advisor— keep an eye out for them when evaluating potential advisors.
What are the qualities of a good financial advisor?
#1: Asks questions
A personalized financial plan is about more than your assets — it’s about how you spend your time, what you value, and your goals for the future. Without actively seeking this information out, your advisor won’t be able to create a plan that’s tailored to you and your needs.
From the very beginning, your financial advisor should ask questions about who you are, what you do, your current financial status, the financial milestones you hope to achieve, and more. Be wary of anyone who jumps right to business without first discussing your loved ones, work life, and future goals.
Beyond simply helping to craft a sound financial strategy, asking questions demonstrates that the person you’re speaking with will be personally invested in and care about you. After all, to the right financial advisor, you’re more than just the sum of your assets — you’re a person with your own unique life circ*mstances and dreams. When your financial advisor sees you like that, you can be confident they’ll always have your best interest in mind.
READ MORE: 10 Questions to Ask Before Hiring a Financial Advisor
#2: Goal-Orientation
Personal goals should be the backbone of any financial plan, from short-term goals like saving up for a vacation to mid-term goals like purchasing your first home to long-term goals like retirement or paying for your child’s college education. Goals like these will serve as the North Star for your personal financial plan — every decision you make and every action you take should map back to them.
Demonstrating intentionality like this is one of the telltale characteristics of a financial advisor that is worth their salt. Advisors should employ a purposeful approach that focuses on what matters most to you, not a one-size-fits-all strategy. So if you notice an advisor talking about working with all of their clients in the same way, watch out — they may not be able or willing to adapt their approach to your specific needs.
And if you ever have questions about a recommendation your financial advisor has made, don’t hesitate to ask. A good financial advisor will always know the “why” and be happy to explain it to you. You should always be courteous, of course, but listening well and asking good questions will only strengthen your partnership.
#3: Proactivity
The whole point of working with a financial professional is to make things easier, not harder. So if you feel you spend lots of time reminding your advisor to follow up on to-dos, it may be time to reassess your partnership. One of the key qualities of a good financial advisor is staying on top of the game: not just taking care of what needs to be done at the moment, but also preparing for the next stage.
So what exactly does that look like in practice? Here are a few examples:
- Getting in touch regarding upcoming milestones in your life
- Keeping you posted on new market trends and changes
- Asking detailed questions to determine your next steps
Of course, you won’t always have urgent items to discuss, but your financial advisor should nonetheless work with you to schedule at least two meetings a year so they can give you an update on your investments and review your financial plan. Setting a consistent meeting cadence shows that your advisor is always thinking ahead — it also helps ensure that you stay on the same page and don’t miss out on any potential opportunities.
#4: Responsiveness
Life comes at you fast. Things like job changes, divorces, and unexpected expenses can pop up at any moment and have a significant impact on your finances. In most cases, of course, your advisor won’t be able to proactively anticipate these events. As long as they are responsive and available, however, this shouldn’t pose a problem.
When a major life change occurs, there’s a good chance that you’ll need to adapt your financial plan to account for it. In those times, it’s critical that your advisor is easily accessible for a call or meeting so that you can touch base and take action as necessary. Infrequent or late communication, as well as brief, impersonal responses, are troublesome characteristics in a financial advisor — which suggest that they may not have the agility needed to effectively respond to change.
READ MORE: 3 Benefits of Having a Financial Advisor
#5: Honesty
If you’ve read up on investment and financial advice before, you may have come across the phrase “past results do not guarantee future performance.” As tempting as it can be to believe that what has worked before will work again, future investment returns are extremely difficult (if not impossible) to predict.
A good financial advisor will know this and be candid about it, rather than making false promises. Honesty like this is one of the most important qualities of a good financial advisor, not just because it will provide you with realistic expectations, but also because it speaks to a financial advisor’s overall integrity.
As a fiduciary, a certified financial planner (or CFP®) professional is obligated to do what is in their client’s best interest. If they aren’t honest about the risks or issues you encounter along the way, they’re violating that commitment — not the kind of behavior you want to see from the person you trust with your finances. An advisor who tells it to you straight and helps you plan for any scenario, however, demonstrates the integrity and knowledge that all good financial advisors need — giving you confidence that your finances are in good hands.
#6: Passion
Truly great financial advisors don’t just go through the motions — they love what they do. Easing clients’ financial stress, making their lives easier, and allowing them to focus on what matters most to them is important, meaningful work, and the advisors who take this to heart are better at their jobs.
Why? Because a passionate financial advisor will use their best efforts and resources to help you find a resolution. Even if they don’t know the answer right away, they’ll be willing to do the research necessary or connect you with a subject matter expert who can better address your question.
Beyond a general sense of enthusiasm, one sign that a financial advisor is passionate about what they do is that they’re always looking to expand their knowledge and stay up-to-date with the latest information, like changes to financial regulations and industry best practices. Ask any financial advisor you’re considering working with how they stay on top of the news, or what they think of the latest market developments.
SEE ALSO: Learn about our advisors here
Find the financial advisor you deserve
Now that you know what to look for in a financial advisor, it’s time to go out there and find one. Reach out to Team Hewins today to book time with a caring, goal-oriented, proactive, responsive, honest, and passionate financial advisor!
