At some point in life, whether you are young or old, you will find yourself in need of a financial advisor. And when you do, make sure its a good fit and trusted partner. A good financial advisor has your back! Sounds simple, but all financial advisors are different. To help figure it all out, here are four things a good financial advisor should do:
Actively Listen
You need a person who can listen and understand you. A financial advisor should pay attention to clients when they are talking. They are curious about a feeling you have or why you mention something. The advisor will want to understand your financial situation, goals and your relationship with money first before any type of recommendation. Most of all they will be engaged with your ideas and plans, not their own!
One important element of being a skilled listener is to follow the client to where they are and be with them. Let’s say you are scared, but want to invest. Your advisor should be able to keep this feeling in mind, be sensitive to this fear and tailor the solution. They will also highlight the trade-offs in this process. All along, you’re being acknowledged, understood and listened to while still getting their advice.
Understands and Optimizes Your Current Situation
You need to make sure your advisor takes a holistic approach to understand, analyze and optimize your current financial situation first. Before thinking about any future goals or recommendations an advisor will assess questions like:
- What are the strengths of your current financial situation?
- What are areas for improvement uncovered through an initial analysis?
- What impact will professional or personal changes have on your financial situation?
By doing a thorough financial analysis, you will see how all the pieces fit together. A good financial advisor will help you to organize your current situation and know if it will facilitate or inhibit your future growth. They’ll crunch the numbers first, which will provide you with the foundation for designing your financial plan.
Creates a Financial Roadmap for You
Financial planning is like planning a trip. You need a roadmap that will help you make better choices on your way to financial freedom. Every twist and turn you make on the journey is important.
So, how can an advisor create a financial roadmap? They will identify where you want to go, what your hopes and dreams are, how you want to live now and in the future and then work backward to identify the best way to get there. After analyzing your current situation and aspirations, your financial advisor will create a list things you can do to get there. Those are your directions. They may be immediate actions or gradual changes. You may find some goals are unrealistic, but they will do their best to help you with simple, actionable steps to get there.
Accessible When you Need Them
Finally, any client seeking the services of a financial advisor deserves someone that is accessible. Accessibility means being able to be approached or reached. When a client needs to talk to a financial advisor, they should make themselves available. Or return emails, texts or messages. How can you build trust with someone if you can’t get their attention?
A good financial advisor is there to help you make money and work toward financial freedom. Whatever goals you have, your advisor should go through your financial plans with you and help you figure out the best way to reach them. Know what to look for in a financial advisor and don’t stop until you find it. They are there to be your partner, so make sure it works for you.
I aspire to practice these principles when working with clients. If you are interested in financial planning services, reach out and let me know how I can help.
Jim is a financial advisor and owner of Thinking Big Financial, Inc. Thinking Big Financial is a fee-only registered investment advisor offering financial planning and investment management services. Specializing in working with the LGBTQ Community.
Please read my legal disclaimer here.