All successful relationships share some key traits. Trust and a true partnership are at the top of the list. This is true not only in personal connections, but also in your relationship with your financial advisor.
However, in today’s fast-paced and increasingly digitized world, personal financial relationships are too often undervalued. You probably have noticed the recent push to robo-investment advice, for example. This online wealth-management service provides automated, algorithm-based portfolio management advice without the use of human financial planners.
Yes, technology is a valuable part of finances. And yes, the results it provides are easily measured. Yet a personal advisor provides benefit—though measured differently—of equal or even greater value. To ensure that you and your financial professional have a strong and successful relationship, you should pay attention to the following three necessary and intangible characteristics.
Trust is the cornerstone of all successful relationships. Most people who outsource the management of their investments likely trust that the entity they employ will do its best to provide the best return. That is absolutely measurable.
As your wealth grows, along with its complexity, the trust factor increases. Do you trust that your advisor will consider all your wealth needs, including those of your family? Do you trust that he or she will prioritize your best interests?
While it can be hard to measure these attributes, you can certainly examine your advisor’s services, expertise, personality and company structure to help you make an appropriate evaluation.
When you find an advisor who expertly provides the services you need, another important requirement of them is a deep knowledge of your and your family’s financial lives. Basically, the advisor must be interested in building a relationship with you.
It is from this relationship-based service that high-quality planning and execution is born. However, I have too often seen individuals and their families grossly underserved by their advisor relationships because they are not true partnerships.
In order for an advisor to guide you toward an optimal financial situation, both currently as well as for the future, you must also invest in the relationship. You must share all aspects of your financial lives.
The advisor relationship you build should also carry over to your heirs.
I have found that the most important thing to my clients is the financial stability of their families.
In addition to ensuring the family’s ability to meet current financial goals, clients are also interested in the future of their children and grandchildren.
This security goes beyond standard assistance with planning for college and trust/estate issues. It extends to your children’s relationship with your advisor. A solid relationship will provide those children with the opportunity to enjoy the same trusted guidance, communication and education throughout their lives. The education we provide the children of clients, no matter what their age or station, is a main reason behind our clients’ satisfaction.
However, I am rarely asked by a prospective new client if we provide this service. But as you interview potential advisors, make sure you get a detailed report of all the support they can give to your family. While traditional and easily measured aspects such as performance data are important, along with staff members’ professional designations and their experience in the business, those are not the only components you need to evaluate. Include intangibles like trust and the potential for a relationship with your whole family in your financial advisor search parameters.
By taking these factors into consideration, you will likely find not only a highly competent advisor, but also one who truly cares.
This article was originally published in the February/March 2016 issue of Worth.