Characteristics of a Good Financial Advisor

Good financial advisors are compared to “life coaches”, because they can help you with many of your complex financial decisions throughout your life. A financial advisor can offer tips on buying a car, saving for college and refinancing your home mortgage, just to name a few. They deal with other financial professionals on a daily basis, and they typically know if you’re paying too much for something or not getting a competitive rate. Great financial advisors will not only help you make money on your investments, but will also help you reach your goals and save money on insurance and other major decisions throughout your lifetime. To maximize your experience with your advisor, you should meet with the person quarterly, share your concerns and goals, and allow your advisor to review all of your financial and legal documents. After all, it’s all about trust.

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So how would you identify a good financial advisor? Look for the following:

• Integrity. It seems as if every week a new financial scandal pops up. Some of the world’s most trusted banks and investment firms seem to have been engaging in deceptive and possibly illegal practices. Many individuals and organizations have lost a great deal of money. Just like people go to lawyers for help because they don’t know the ins and outs of the laws and legal system, people need help from investment professionals. But it’s hard to know who to trust. Success as a professional financial advisor means conducting yourself with integrity and honesty and behaving ethically it’s not just about the money.

• Discipline and perseverance. A financial advisor doesn’t build a client base and a business overnight; it takes time, hard work, discipline, and focus. The advisor must set goals and develop strategies for his or her success. For the first year or two the income may not be enough to make ends meet. Advisors can expect to work long hours, including nights and weekends, which are the only times many clients are available. They will have experience repeat rejections for each successful. It takes discipline and perseverance to keep at it until the tide turns.

• Analytical thinking. These days it takes an expert to make sense of the world of investment and devise apt strategies. We all have access to pretty much the same investment information. What separates the pros from the novices is the ability to logically analyze that information using specific knowledge and skills. No one can predict the future as our wild economic times show us but good financial advisors can look at financial data and make the kinds of recommendations that help clients reach their financial goals.

• Communication skills. A financial advisor needs superb interpersonal skills, both to attract and to maintain clients. The advisor must be a convincing salesperson able to engage prospective clients. He or she must be able to listen actively, convey information effectively, and communicate information and ideas so their clients will understand it. They must be able to tailor the presentation of advice to each investor’s personality and communication style. Excellent communication skills pave the way to success in this profession.

• Dependability. Money is as personal and significant to people as is their health and their family life. A client who comes to a financial advisor expects to be treated professionally. Advisors are responsible for the advice they give and the strategies they recommend. They must consistently do what they say they are going to do within a set timeframe. And they must always disclose the advantages and disadvantages of the each investment option. Clients must be confident that both the advisor and the advice are reliable and dependable.

Finally, remember that this is your money and you’re in control. Question and challenge your advisors if you’re feeling any vagueness and discomfort. Feel free to seek out second opinions. Stay educated and stay in power. A good financial advisor will make you feel relaxed, will listen intently and interpret your needs. You will know a good financial advisor by the questions he or she asks.