The relationship between a client and a financial adviser is an important one. In the best of circumstances, your wealth manager or financial planner becomes a trusted counselor, someone who looks out for your best interests and asks you all the right questions. The right financial adviser can play a key role in helping you chart a course for a secure financial future. But what if you fear you have the wrong financial adviser? How can you know when it may be time to make a change?
This article from Kiplinger, written last year by reporter Jackie Stewart, provides the answer, in the form of five warning signs that it may be time to fire your financial planner. It’s a provocative topic, one that we think deserves another look.
As Retirement Looms, You Need an Adviser You Can Count On
“A strong relationship with a financial adviser you trust matters more the closer you get to retirement,” Stewart’s article begins. “Financial decisions once decades away now loom on the horizon. The last thing you want at this critical juncture is an adviser who doesn’t understand you or, worse, someone you can’t understand at all.”
Stewart’s Kiplinger article points out that the “big events” in our lives are often when problems and conflicts with our professional planners become most obvious. “Life transitions, such as retirement or divorce, often reveal whether your relationship with an adviser is working,” she writes. Stewart quotes Vermont-based wealth manager Kathleen Burns Kingsbury, who cautions that emotions can run high during those transitions, “so it can be hard to make a good solid decision. Ideally, you do it when you are not in crisis mode.”
With that in mind – assuming we’re not operating in “crisis mode” – are there some nagging signs that suggest it’s time to shop around for a new financial adviser? Kiplinger lists five of these alarm bells. Take a look and see if you agree.
Warning #1: Your Adviser Does the Bare Minimum
The first warning sign may be the most obvious. If you get the feeling that you’re just not that important to your so-called adviser, and that he or she is just providing you with the bare-bones minimum of service, maybe it’s time to find a new one. One clue is if your planner never bothers to go the extra mile (or even a few hundred yards) to address your needs.
“Investing is a big part of financial planning,” says Kiplinger, “but it’s not the only piece of the puzzle. A good financial adviser should consider the big picture.” Some of the elements in this big financial picture include strategies for claiming Social Security, handling pension benefits, minimizing taxes, and planning your estate. “Your financial adviser also should be willing to coordinate with other professionals you work with, such as an accountant or estate planner,” Stewart writes. If he or she is doing none of these things, a change may be in order.
(Here’s where a financial dashboard comes into the picture. We’ll address this vital topic a bit further on.)
Warning #2: You Don’t Fall Within Your Adviser’s Niche
“Advisers often work more with a specific type of client,” Kiplinger writes – “for example, those in certain professions or who are a particular age. If you don’t fit that niche, it’s a problem.” If you have a medium-sized estate, for instance, you might not be well-served by an adviser who mainly works with ultra-wealthy clients, and vice versa.
The age of an adviser’s client base can also present a potential mismatch. “If your adviser’s clientele skews younger, you may want one who works with older adults as you approach retirement,” says the article. Mississippi-based wealth manager Jason Jager explained the problem to Kiplinger. “With younger clients, we are talking more about accumulation strategies,” Jager told Stewart. “Once you are nearing retirement, there is so much more that comes into play. You need a distribution strategy.” It’s important that your financial adviser understands that.
Warning #3: It’s a Relationship of Two, Not Three
Married couples are in it together when it comes to financial planning, but for whatever reason some planners seem not to realize it. “A huge red flag is a financial planner who addresses only one spouse—typically the husband,” says Kiplinger. “Some advisers choose one person in the family to communicate with, and they don’t acknowledge the other person’s feelings, needs or goals,” says Karen Altfest, a wealth manager in New York. “A handshake at the door is the most they can hope for.”
This behavior is not only impolite, but also potentially destructive. Being ignored, Stewart warns, “can leave the excluded party unprepared to handle the finances in the event of death or divorce, with their retirement goals ignored.” If your spouse or partner is getting bad vibes from your current planner, you need to pay attention – and quite possibly change advisers.
Warning #4: You Have an Uneasy Feeling
Sometimes, says the Kiplinger article, instinct is your best guide. “Trust your gut if you leave a meeting feeling uncomfortable,” says Stewart. “If your adviser fails to provide detailed information about your investments, is evasive or discourages you from having your partner or another trusted family member involved, you should be concerned.” What’s more, you deserve a prompt and clear response when you call your adviser with a question. He or she should be able to get back to you in a day or two, with everything explained clearly.
“If your adviser is tripping over his words, if he refuses to tell you the costs associated with your portfolio, if he is not sending you statements regularly, ask more questions. A true professional won’t mind,” New York-based Karen Altfest told Stewart.
Warning #5: You Feel Ignored
Is your adviser making you feel forgotten and unimportant? That’s a big red flag, says Kiplinger. “Your financial planner should check in with you at least once or twice a year, or when something significant happens, like a change in tax law,” Stewart writes. He or she should take the initiative and reach out to you. If that’s not happening, a hard conversation may be in order.
“You also shouldn’t have to repeat yourself,” says the article. Kathleen Burns Kingsbury, the planner from Vermont, gained firsthand experience with this situation when she and her husband switched from an adviser they had worked with for several years because they felt he wasn’t listening. “We kept saying the same thing over and over again, and we just didn’t feel heard,” she told Kiplinger.
You’re Ready to Change – so Now What?
Depending on the relationship you’ve had with your current financial planner, some of these issues described above might be resolved with some heart-to-heart communication. He or she may be unaware of your frustration and could be willing to make the adjustments required to keep you as a client. But if the behavior continues, or your frustration has reached the breaking point, it’s probably time to start looking.
Rajiv Nagaich offers this helpful insight. “In my view,” he says, “an adviser who knows what he or she is doing will help you take a truly comprehensive view of your plan – and that means a thoroughly developed financial dashboard. The dashboard approach is so essential that I wouldn’t consider recommending a financial planner who doesn’t use it. It’s the best way I know for you to see the big financial picture.”
The process of finding the right financial adviser can be tedious. You can always contact us at AgingOptions for some suggested approaches you can take to seek out the professional adviser who’s right for you. At AgingOptions we have a network of trusted financial advisers whom we can recommend with confidence if that would be helpful. We would be honored to assist you.
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(originally reported at www.kiplinger.com)