The surprisingly simple BEST way to evaluation a financial advisor

We all would prefer to work with people we Know, Like, and Trust. Getting the Trust phase takes time--and as you are working towards it, your experience will far smoother if you Like your advisor. Trust your gut in deciding when and how to go forward with someone.

Transcript

Sean 0:01

Hey there! Welcome to How to Find a Financial Advisor. I'm Sean. So you can find a lot of articles on the internet or on YouTube videos when you are trying to figure out what questions to ask a potential financial advisor or financial planner. So if you Google that, if you're searching around, you'll find lots and lots of lists of the things you're looking for to ask. And those are very helpful or can be, but oftentimes I find having a checklist like that kind of misses a broader point. So I wanted to give you what I think is the best sort of meta individual single question to help you identify and get a feel for if a potential advisor is a good fit. And that question is what questions are you going to ask me? So in other words, while it still might be helpful to go down your checklist, if you are not a trained professional and you're trying to evaluate a professional, it's hard to always know what to make of their answers. So I have this challenge if I go to do anything, for the most part, you know, a contractor for my house, a mechanic for the car, a doctor, an attorney, a C not a CPA, but other professions where I don't have domain knowledge, oftentimes I don't know how to evaluate the answers to the questions I might have to ask a potential doctor or a contractor. So a lot of the answers might sound great if you don't have a trained person there to help you evaluate the answers or to compare. So while again, I think it's good to have a checklist and these you know popular questions of what to ask a potential advisor. But I would mostly I would way uh more be interested and give more weight to what do they ask me? Uh for example, if you are meeting with someone and they ask you um, how much money do you have? Um when can you when when can you move it? Um you know, how much money, what's your income, um, what's your job, you know, if you if you're if they're asking things mostly about the money, uh, or your only about your insurance, only about your uh taxes, or only about your homeowner's insurance, uh that tells you one thing. Uh on the other hand, if someone asks you questions like, tell me what you're trying to accomplish, what are your goals, tell me about your family, what's most important to you about money, um, how do you want to spend the last years of your life? What's your professional uh trajectory look like? How are you trying to improve your job? Um, you know, who do you want to who do you want to leave money to? What's what's what are your most important relationships? Now, those kinds of questions, you know, you you can probably see a difference in the in the first list and the second list. So I think if you listen and kind of pay real close attention to the types of questions someone asks you, that will give you a sense of where their focus is. Doesn't mean someone who only asks about your uh disability insurance can't be very useful in your financial planning or in your friend as a financial advisor, but they may that might might mean they're pretty focused on disability insurance unless you've somehow brought that to the table, uh, which again might be appropriate for certain occupations. It's sort of a necessity. Um, or if they're only asking focusing on the life insurance component and you're a single person uh in their 20s with no obligate financial obligations, it may not may not add up. Or if you're a um young tech worker and with with unlimited upside income and someone's talking to you about social security planning, uh that may mean it's not a quite a great fit, even though social security planning is still very important for a lot of people and could be useful and important for a 20 or 30-something uh tech industry employee. It may mean they're focusing more on people that are closer to retirement or who are more uh either blue-collar or middle class uh investment uh income, so that that will be a bigger chunk of their income in retirement than someone who's able to amass the kind of wealth that a tech employee might be able to. So again, it's it's I think the very most important and easiest question to ask, if you can do it before a meeting, um, maybe ask for a list of questions that you're going to be asked. That would be a way to say, uh, what am I getting into? And also it also, this another benefit of this question is it uh allows you to see what the advisor's process is like. So if you just make ask them to ask the questions, uh even if they say, hey, tell me about yourself, and and you know, you want to be polite and you could say, hey, I'm happy to do that, but I'd like to know what you'd like to ask me. And that either ahead of time or in a meeting, uh, that could most definitely uh give you a different way to compare and get a sense of um where a professional is focusing, whether that's a specific kind of product, a part of financial planning, or if they're more holistic and comprehensive, again, depending on your situation, you might benefit from a very narrowly focused uh advisor or other professional, but it's good to know that ahead of time because uh if you're assuming someone is a more comprehensive, holistic, um, big picture uh financial life planning type uh helper, but you're the they really this you're going to someone that focuses on uh term life insurance, um your expectations may be way off, and so might theirs if if they're not good at articulating where they specialize. So I hope that uh gives you a good sense of that one secret question that I think is the best way to get to if a particular advisor may or may not be a good fit. Again, that by itself won't do it, but I think that's a great way to start your exploration process and you know, trust your gut a little uh for the most part on if you're if you're asking those people to ask you questions, then you can sort of see how they guide the conversation. And if it's if it feels like it's focused on one uh area in particular, um that could tell you that you want to be on the lookout for uh not having the more big picture planning if that's what you're looking for. So uh that's all for now. That is the most important question that you can uh ask a potential financial advisor, which is what questions are you going to ask me? Thanks, and we'll see you next time.