FINANCIAL ADVISOR TOP 10'S
Please take a few moments to review these three TOP 10 lists, and then complete the discovery form below so we can develop a script that best tells your story & communicates why you are the right choice for financial services in your market.
Mistakes people often make when choosing a financial advisor:
1. Not Checking Credentials: Many people skip checking if an advisor has legitimate credentials like CFP (Certified Financial Planner), CFA (Chartered Financial Analyst), or CPA (Certified Public Accountant). These certifications indicate a level of professionalism, education, and ethics that can be crucial for sound advice.
2. Confusing Advisors with Salespeople: Some "advisors" are primarily focused on selling financial products, like insurance or specific investment funds, rather than giving unbiased financial advice. This can lead to a mismatch if the client's goals don’t align with the products the advisor is incentivized to sell.
3. Ignoring the Fee Structure: Advisors can charge fees in various ways—commission-based, fee-only, or a combination. Not understanding the structure can lead to unexpected costs. Fee-only advisors are typically less likely to have conflicts of interest than commission-based ones, who might prioritize products with higher commissions.
4. Lack of Background Check: Many people fail to check the advisor’s disciplinary history or past client complaints, which can often be accessed through the SEC or FINRA BrokerCheck. Overlooking this can put clients at risk if the advisor has a history of misconduct.
5. No Clear Goals: Without clear financial goals—like retirement, saving for education, or investment planning—it’s hard to gauge if an advisor’s approach aligns with what the client truly needs. Goals can guide clients in choosing someone who specializes in areas that match their objectives.
6. Choosing Based on Personality Alone: While having a good rapport is important, personality shouldn’t be the sole factor. Sometimes clients choose an advisor because they seem friendly or likable but overlook their actual expertise and track record.
7. Not Asking About the Investment Philosophy: Advisors can vary widely in their investment strategies. Some may focus on long-term index fund investments, while others might be more speculative. If their philosophy doesn't align with the client’s risk tolerance or goals, it can lead to dissatisfaction and financial setbacks.
8. Failing to Understand Fiduciary Duty: Fiduciaries are legally bound to act in their client’s best interest, whereas non-fiduciaries don’t have the same obligation. Many people don’t ask if their advisor is a fiduciary, which can result in receiving advice that might not prioritize the client’s interests.
9. Not Asking for a Comprehensive Financial Plan: Some advisors focus only on investments without looking at the client’s overall financial picture, like tax planning, estate planning, and retirement goals. A good advisor should help craft a comprehensive plan that considers all aspects of financial health.
10. Neglecting Regular Reviews: Financial planning is not a one-time event. It requires regular reviews and adjustments as life circumstances change. Some people set it and forget it, not realizing that regular check-ins with their advisor can help stay on track toward their goals.
Concerns people have when looking for a financial advisor:
1. Trustworthiness and Integrity: Many people worry about whether the advisor will act in their best interest or if they’re only interested in pushing products that benefit the advisor’s commission. Clients often seek an advisor who operates transparently and honestly.
2. Fee Structure and Hidden Costs: Fees can be a major concern, as different advisors use different pricing models (commission-based, fee-only, or asset-based). People worry about hidden fees, high commissions, or advisors charging for unnecessary services.
3. Experience and Qualifications: People want to ensure their advisor has the right credentials (e.g., CFP, CFA, CPA) and sufficient experience in financial planning. The concern here is that an advisor without proper qualifications or experience may not provide reliable advice.
4. Investment Philosophy and Strategy: Clients often worry about an advisor’s approach to investing. Some may prefer a conservative, long-term strategy, while others are more comfortable with higher-risk investments. A mismatch in investment philosophy can cause clients to feel uneasy or even lose money.
5. Understanding of Personal Goals: Clients want an advisor who takes time to understand their specific goals, whether that’s retirement, home ownership, or education funding. They worry that some advisors might apply a “one-size-fits-all” strategy rather than tailoring a plan to their needs.
6. Conflict of Interest: Many people are concerned that advisors might have financial incentives to recommend certain products or services, creating a potential conflict of interest. This is especially relevant when the advisor isn’t a fiduciary, as they might not be legally bound to act in the client’s best interest.
7. Communication and Accessibility: Clients value regular, clear communication and updates on their financial progress. Many worry that some advisors may be difficult to reach or don’t provide enough ongoing support after the initial planning stage.
8. Risk Management and Downside Protection: People often want to know how well their advisor can protect them from market volatility and downturns. They’re concerned with an advisor’s approach to risk management and whether they’ll act responsibly to minimize potential losses.
9. Transparency in Performance and Reporting: Clients want to understand how their investments are performing and expect clear, accurate reporting. A lack of transparency can make clients feel left in the dark about their finances, leading to frustration and distrust.
10. Long-Term Stability of Relationship: Some clients are concerned about the advisor’s longevity in the industry and if they’ll be around for long-term planning. People worry about advisors leaving the firm, retiring, or changing roles, which can disrupt their financial planning.
Why people ultimately decide to switch financial advisors:
1. Lack of Communication: If an advisor is hard to reach, provides limited updates, or fails to communicate proactively, clients may feel neglected and look for someone more responsive.
2. Poor Investment Performance: While market fluctuations are normal, clients may seek a new advisor if their portfolio consistently underperforms benchmarks or if the advisor’s strategy doesn’t align with their risk tolerance.
3. High Fees or Hidden Charges: Discovering unexpected fees, commission-based product pushes, or a high cost-to-benefit ratio can prompt clients to find an advisor with a clearer, more affordable fee structure.
4. Mismatched Investment Philosophy: As clients’ financial goals or risk tolerance evolve, they may find their advisor’s strategy (aggressive vs. conservative, active vs. passive) no longer aligns with their preferences.
5. Lack of Personalized Attention: Some clients feel that they’re getting a “cookie-cutter” approach rather than tailored advice. If an advisor doesn’t take time to understand their specific goals, clients may look for one who offers a more personalized experience.
6. Loss of Trust: Trust is crucial in a financial advisor relationship. If an advisor makes decisions without client consent, fails to disclose conflicts of interest, or appears to prioritize their own financial gain, clients are likely to move on.
7. Advisor’s Lack of Expertise or Specialization: As financial needs become more complex (e.g., estate planning, tax strategies), clients may need an advisor with expertise in specific areas. If an advisor lacks this specialized knowledge, clients may switch to someone with more relevant skills.
8. Poor Transparency in Reporting: Clients value clear, regular, and accurate performance reports. If they feel left in the dark about their investments or find the reports confusing, they may seek an advisor who is more transparent.
9. Life Changes: Major life events—such as marriage, inheritance, retirement, or starting a business—often prompt clients to reevaluate their financial planning needs and may require a new advisor with skills suited to these transitions.
10. Lack of Progress Toward Goals: If clients don’t feel they’re making headway toward goals like retirement, college savings, or debt reduction, they may seek a new advisor who can create a more effective plan to achieve their objectives.