How To Find A Financial Advisor

The WRONG questions to ask a potential financial advisor

Sean Kernan Season 4 Episode 1

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0:00 | 4:44

Sean talks about questions that you absolutely do not want potential financial advisors to answer without asking a dozen questions back at you. 

Sean

Hey, this is Sean with How to Find a Financial Advisor. I've been a certified financial planner for about 18 years, and I can help you decide if you need an advisor for the first time, or maybe confirm that you don't. Or if you're looking to replace your advisor, I can help you make sure you're looking at all the choices available and having the best chance of picking someone that's the best fit for you. So oftentimes on any kind of website, you'll see frequently answered questions, FAQ. Well, in this video, I'm going to talk about what I think should be frequently unanswered questions. In other words, they're not the right questions to ask. So if your advisor is focusing on answering these kinds of questions, I think you should keep looking. So the first one is what do you think the market's going to do this year, over the next six months, in the next two years, in the next week, any kind of time frame less than at least five years out, I don't think advisors or anyone should really try to be answer that, answering that, because the even though we know the predictions might be wrong, just making the predictions or the guesses tend to give you a false sense of confidence that it's possible to guess these sorts of things. The long and short of it is, the longer time horizon you have, the better odds you have of making money in any investment, especially that's market related. So if people are focusing on what the market will do in the short run, that's probably not the best fit. Another unanswered question, or one that should be frequently unanswered, would be what stock do I invest in? What's the best investment? What's the best stock? What's the best annuity? What's the best insurance policy? What's the best single individual investment, especially if there's been no diagnosis of you, your specific needs. So if someone is trying to sell you on what is this great investment, whether that's a stock, a bond, a mutual fund, an exchange traded fund, uh any kind of widget, if you will, I would step away, walk away, maybe run away, depending on how aggressive they are about their recommendation. Another frequently unanswered question that I tried to focus on is did you see such and such on CNBC, or did you see such and such in the newspaper? Typically, if it's in the newspaper and you're trying to make decisions about it, or if it's on financial TV, you're gonna have a hard time benefiting from that because those that content is not designed for good long-term planning. It's designed to get attention. It's no better than this YouTube video or other videos on YouTube that are with crazy headlines, crazy uh thumbnail images. You know, for better or worse, any kind of media is trying to get your attention, and the boring long-term plain vanilla stuff does not get attention. Uh the diet stuff that says you know, eat and drink fewer calories than you consume does not get attention. So, therefore, um you're not going to see it as often, but it's the most valuable, even though it's the simplest. Simple but not easy. So if someone's answering uh stuff about current events or you know, talking about what everyone else is talking about, probably not a good sign. And then the last and more personalized version of this would be if if someone asks, uh, if an advisor or a potential client asks an advisor, well, what do you think about such and such? Whether that's a an investment strategy, uh financial planning question about social security benefits, you know, when do you take social security, or um how much should I have in my 401k, or you know, should I be doing Roth conversions? If an advisor is answering those questions without asking about 10 questions back at you, they're probably not the most thorough advisor or planner on the block. Because if you ask me, should I do Roth conversions or when should I do Roth conversions, there's a long list of questions I need to ask and get good answers to before I can give a reasonable, thoughtful, useful answer without potentially committing malpractice and giving you a more boilerplate answer. So hope that helps. Those are some examples of frequently unanswered questions, at least by me, and I would propose for just about any advisor. You don't want them answering those questions, even if you're asking. Thanks, and we'll see you in the next video.