Back in a previous life I was managing the Toronto office for a disability insurance office, and I decided to move that office from the downtown core to North York. So, I called a commercial real estate firm for help. The man who showed up was, in my estimation, more of a boy, and I immediately wondered if I should look for another firm given the size and importance of this transaction. But, he quickly won me over. And ultimately, I realized that I could not have found a better person – or more accurately a better team – to do the job.
Experience does count, a fact that often frustrates young people on any career path who can be heard declaring, “How can I get any experience, if you don’t give me a chance?”
But experience isn’t the most important factor to consider when looking for a great financial advisor.
Consider these 5 key characteristics of a great financial advisor.
- They put you first. This is obvious. And regulators and policy makers in the financial services industry would argue that it is in fact a law. Still, you need to worry about this. I don’t have any secrets for figuring this out at a first meeting, but over time it will become apparent if your advisor is making recommendations that serve them better than they serve you. Any conversation that starts with a solution is a red flag.
- They start by preparing a financial plan. I’m at a loss to understand how financial advice can be provided without a financial plan as the roadmap. Even if you don’t think YOU need one – the advisor does.
- They offer a wide range of products. If all clients have the exact same financial solutions, then you should look remarkably like all other clients, which is doubtful. Imagine if all doctors prescribed the exact same medicine for all patients regardless of their ailment.
- They have an aptitude for financial services. The financial landscape is complicated and rapidly changing. So, any good advisor is going to have to have skills with math, money, and people. Someone who enjoys what they are doing and is able to simplify and explain the strategies they recommend has the right aptitude. Someone who tries to convince you to just trust them might not.
- They build long term relationships. The better an advisor knows you, the better the advice. Regular contact over many years usually leads to knowing you better.
Notice that none of these characteristics have anything to do with age, or experience. Yes, many of the skills or characteristics among my list do tend to improve with experience. But, bad habits also develop over time.
The fact is, you may actually be better off with an advisor who may appear to be too young! Embrace their enthusiasm and ask questions to help assess whether this young person is on the right career path. You may find that they make up for their lack of experience by going the extra mile to provide you with the best advice and take extra time with you to ensure that you provide them with a “five-star rating.”
In many cases, as with the young advisors working with our firm, they are part of a larger team. A team that has a great deal of experience and work together to share perspectives and benefit from the differences they bring to the table. In those cases, you might be better off working with the young associate than with the soon-to-retire senior. (My client’s being the exceptions of course).
When you are knee deep into retirement and still working with the same trusted advisor who got you there, you can send me a thankyou note.