3 min read
You leave your financial advisor’s office with a nagging doubt. They’re the one with the credentials, of course. But something’s not right. Should you get a second financial opinion?
Yes, say those who have done so, and don’t think twice. A fresh perspective can make all the difference for your financial health and confidence. Here are a few good reasons to schedule an appointment with a different advisor.
1. You’ve suddenly been told you are “assigned” to a new advisor.
Perhaps your advisor is leaving their firm or has let you know they are retiring, and you will now be working with someone you’ve never met. This is common these days. The financial industry is currently experiencing a wave of older advisors selling their businesses or simply closing their doors. You want professionals that will grow with you and work with you for many years to come.
2. There’s been no mention of recommendations to support your goals.
Has your advisor asked you recently about your life goals, your values, your health or your family? When you anticipate needing money for retirement, college, or a career move? Your circumstances may change over time, and your financial strategies need to be updated to reflect your changing needs.
Even before your advisor gives you specific recommendations, they should be able to tell you a general direction based on their understanding of your unique situation — or at least a range of possible approaches to consider in your financial plan.
3. You’re hearing about only one possible option.
How is your financial advisor compensated? If you’re hearing about only one possible option, it raises questions about whether the advice you receive is based solely on your best interest, is it driven by commissions, or is there no way for you to tell? You want your advisor to present multiple alternatives to you, along with their pros and cons. They should be able to explain the actions, products or investments they are recommending in detail, as well as the rationale for why it is right for you. You need more than an “Investment Person”; wouldn’t you want someone who puts your interests first? Real financial planning and a fiduciary standard of care involves much more than a stock pick and some reports when you call.
Whether or not your advisor is an Investment Advisor Representative held to the fiduciary standard, you want to understand your advisor’s compensation structure for each recommended option.
4. You are not hearing back in a timely manner.
Your money and your financial independence are important to you. A week is too long when markets are in turmoil and you are feeling insecure. If your financial advisor takes too long to get back to you, it’s time to look elsewhere.
5. Your needs are not their expertise.
Are you a business owner? If so, you know that your business is unique – and how it affects your personal finances is even more nuanced. Does your advisor interface with your other chosen professionals in tax planning, estate planning, or your small business legal needs? If your entire team is not on the same page, there may need to be some re-alignment.
Owning a business and charting your own course to retirement may look quite different than the careers of others. No matter what your plan is, whether you are crafting a detailed succession plan, looking for an outside purchase, or yet to be determined – you need a planner well-versed in these transitions to help you avoid the potential pitfalls along the way.
6. You just don’t trust your advisor.
Sensibly, you may remind yourself that when you checked your investment advisor’s record on FINRA’s BrokerCheck®, there were no disclosures listed. (As BrokerCheck explains: “All individuals registered to sell securities or provide investment advice are required to disclose customer complaints and arbitrations, regulatory actions, employment terminations, bankruptcy filings, and criminal or civil judicial proceedings.”)
But if you still feel uncomfortable, remind yourself that financial decisions are too important to succumb to procrastination when you are uneasy about your advisor. If you don’t think they are listening to you or taking you seriously, it’s time to find a different advisor.
Sometimes the recommendations from a second financial advisor confirms the counsel you’ve been given by your current advisor. Again, don’t procrastinate. Decide which firm feels best to you for the long-term. After all, it’s your money and your future. It never hurts to get a second opinion.
Resources
Financial Planning Association
Certified Financial Planner Board of Standards, Inc.
Financial Industry Regulatory Authority BrokerCheck®
Adam Robert, CFP® APMA® is co-owner of Clute Wealth Management in Plattsburgh, NY, and South Burlington, VT, an independent firm that provides strategic financial and investment planning for individuals and small businesses in the Champlain Valley region of New York and Vermont. For a list of states in which we are registered to do business, please visit www.clutewealthmanagement.com. Securities and advisory services offered through LPL Financial, Member FINRA/SIPC.