Posted on July 21, 2016 in ,

6 traits of bad financial advisors

In the last article, we discussed finding the financial advisor right for you. There is a lot to consider during that search as they can add incredible value to your financial well-being and enhance your quality of life. But how do you know you’ve chosen the right person to guide your financial future? It’s important to recognize not all financial advisors are alike. Here are some things to look out for to protect you from picking or staying with the wrong advisor.

Red flag number one, they overlook your spouse. There have been instances where widows have left their long-term advisor because of this factor. If you are working with an advisor who ignores you and communicates specifically with your spouse, talk with them about switching to someone you’re comfortable with and serves you equally. This will give you and your family peace of mind for the future.

They don’t communicate. There’s no doubt financial advisors are busy, but you should always get a response in a decent amount of time. Most clients make reasonable requests and deserve prompt answers. If an advisor is taking too long to get back to you, whether it’s a phone call or email, you may consider making a switch. Remember, you’re paying them to keep your mind at ease. Communication is key!

They put their interest first. This can be common when dealing with brokers. You want to be assured the product they’re suggesting is the best choice for you. Ask questions on how your advisor is compensated and if the results could be a conflict of interest. Does the advisor have a fiduciary duty toward his clients? Your advisor may say he has your best interest at heart, but ask if he is legally bound as a fiduciary to act in your best interest. Some financial advisors that are not fiduciaries are held to a lower “suitability” standard, which means they are allowed to make recommendations that may be broadly considered suitable to the client, but may not be in the client’s best interest.

Advisors who talk down to you. Financial discussions can be complicated and difficult to understand. It’s your advisor’s job to explain a certain course of action in a way that makes sense. If someone is not meeting this goal and is talking down to you, be assertive and switch to someone that leaves you feeling positive about yourself and your assets.