There are some great checklists for choosing a financial advisor. The good ones include asking about education, professional credentials, how long they’ve been in the business, and what services they offer. But some of the most important information you’ll need isn’t on a checklist. And it’s very hard to find. You can’t ask it in a question and count on a reliable answer. Your gut or the financial planner’s other clients might be able to answer it. But some of these planners might not even have clients yet. So what is it?
Can you trust the planner?
Because if the answer to that question is “no”, don’t bother asking other questions.
I’m fortunate to have many trustworthy financial planning colleagues. One of them told a story recently that illustrates this. About five minutes before a client came in for an appointment, he found an error his staff had made in her account. It was – for him – a large error of about $10,000. So the first thing he did when she arrived was explain the mistake and write her a check that made her whole. That check pretty much cleaned out his firm’s operating account on that day. That was several years ago and the woman is still a client. He didn’t try to gloss over or hide his mistake. And she appreciated that people make mistakes, but the best people own up to them and deal with the consequences.
So trust your instincts when choosing a financial advisor. Technical knowledge and expertise are important. But honesty is priceless.