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When you’re seeking a financial advisor to invest with, trustworthiness is the most important trait to look for. A professional advisor will demonstrate trustworthiness. The benefit of a trustworthy advisor is the knowledge and confidence you’ll have when making financial decisions.
Trust is a sacred trait. A trustworthy advisor will make appropriate recommendations for you even when those recommendations are not in his or her best interest. A trustworthy advisor will tell you what you need to hear, not what you want to hear.
In addition, a trustworthy advisor is a warrior for you and your family. Their job is to advise and assist you in doing the right things at the right time for the right reasons with the right people. A trustworthy advisor wants you to have comprehensive advice. Trustworthy advisors give you information the way you need it.
A trustworthy advisor will look at the relationship, not just the transaction, and will be less prone to potential conflicts of interest. So how can you tell if your advisors are there for you first?
• They act with prudence, care, and good judgement at all times.
•They provide understandable, full and fair disclosure of important facts.
• They provide full disclosure up-front of any potential conflicts, including any potential benefits a transaction may bring to them
• They are empathetic, confident, competent and concise.
• They are always sitting on “your side of the table.”
• They see you as a long-term relationship, not just as a sale.
In addition to being trustworthy, the qualifications and designations of your financial advisor are also critical. We think of advisors as experts in a particular field. Do some research on a prospective advisor’s title or professional certification. Ask your advisor to explain what he or she did to qualify for that title. For example: “I had to complete 60 hours of coursework and sit for a series of comprehensive exams.”
Also, look for these designations and their applicability to your particular situation. A designation alone doesn’t guarantee that a particular advisor is operating in a certain way.
• CERTIFIED FINANCIAL PLANNER™ (CFP®)
• Certified Funds Specialist (CFS)
• Chartered Life Underwriter (CLU)
• Chartered Financial Consultant (ChFC)
• Chartered Advisor in Philanthropy (CAP)
• Accredited Domestic Partnership Advisor (ADPA)
In our next article, we’ll examine financial plaque-how a build-up of poor financial decisions over a period of time can affect your financial portfolio.
