Hiring a Financial Advisor? Look Here First…

Ernie Neve, CPA

November 19, 2020

It’s no secret that in these emails, month after month, I give out what could be termed “financial advice.”  Now, that’s not strictly the case, because I’m not officially a financial advisor, but the team and I get a load of calls from clients asking me who I recommend.

I guard those names closely.

In fact, I’d never simply put out a list of who to call, because it would be extremely unprofessional. 

On the other hand, I can share some advice on what to look for if you think it’s time to hire somebody to counsel your financially. 

First things first – you need to trust them.  Whatever may be said for skills and reputation, if a financial advisor doesn’t “feel” right, then you absolutely should NOT hire them.  They are going to be asking you questions – sometimes hard questions – and if you aren’t comfortable with the individual, then the advice is likely to not be taken.  At the same time, they need to feel the same way about you.  Are your personalities and styles compatible?  It’s a bad sign if you expect to meet face-to-face (or, these days, with a video conference) and they prefer emails.  The same can be said for time zones, availability, and even how easy it is to schedule time with them.

Next, you need to consider what a given advisor specializes in.  Are they trained to help retirees?  Real estate investors?  (This is also the place to mention age – are they going to be able to handle your accounts for a long time, or are they going to retire or sell their book of business?) Knowing THEIR goals can help to make sure you’re picking the right partner. 

Another piece to think about and understand is to know how your potential advisor gives advice.  That seems simple, but the reality is, if you’re opposed to stocks and an advisor is strongly for stocks, you need to find another advisor – one who believes in the strategy you are most comfortable with.  This isn’t to say that your strategy is the only one – or even the right one – but if you like real estate, then somebody who also feels passionately about real estate is a better choice. 

One of the last big things to consider is how a potential advisor is paid – and if they work for you or for a business.  The term most often used is “fiduciary responsibility” and the basic definition is this:  they are ethically bound to act in your best interest.  When you go down to the local branch of the national “financial advisors” what you get is financial advice designed to sell their company’s products.  Yes, in some instances, the advisor in question looks out for your interests, but most often, they are paid a commission on the sales of the products they sell for the company. 

That’s probably not your guy. 

You want someone who is working for you, not on you. 

I hope this gives you enough to get started, but if you have questions, feel free to reach out and let’s see if I can help you choose the right person for your team.

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Phone: (610) 278-8400
Email: eneve@nevegroup.com