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11 characteristics to look for—or avoid—in a financial planner

11 characteristics to look for—or avoid—in a financial planner

November 13, 2019

Choosing the Right Financial Planner: What to Avoid

When you decide you need a financial planner, it’s hard to sort through them all to find the one that makes the most sense for you. I’ve put together a list of things to look for—and things to avoid—when you’re seeking a partner to help you plan your financial future.

Three things to avoid:

  • A big fancy office. Rent, office furniture and staff cost a lot of money. To pay for a really nice office setup an advisor needs to generate substantial revenue every month. That revenue comes from clients. To pay for the nice facilities, one of two things needs to be true: Either the advisor works with a lot of clients, or each client is paying a large amount of fees each month. Does either of those appeal to you?
  • Lots of production awards. Plaques for President’s Circle, Diamond Club and the like can seem impressive and can suggest excellence, but often they demonstrate that the advisor is able to generate more revenue than her peers. It tells you that they are excellent at convincing prospective clients to buy products or services that create income for the company. It does not tell you if this advisor can help you hit your retirement target date.
  • Alphabet soup after their name. The financial service industry is filled with designations. Many of them don’t mean much. Often you can pay a fee, watch a webinar and claim the designation. The one designation that does mean something is the CFP® certification. This is the industry reference for professional financial planners. It requires rigorous study and years of experience.

When you talk with a financial planner, I would encourage you to focus on the relationship aspect of working with him/her rather than the technical aspect. Today, anybody of good faith can access all technical excellence any client needs. If you are confident that the planner understands you and your goals, the advice you get will be better. If you can easily understand their advice, it is more likely that you will act on it.

Here are some characteristics to look for in a great planner:

  • Purpose. They have a clear mission to serve clients and help them reach their goals.
  • Empathy. A great advisor will assume a client’s perspective. Empathetic advisors put themselves in their clients’ shoes and work to understand what matters most to them.
  • Authenticity. A great advisor reveals their true self to clients. They share their own personal stories and are transparent and vulnerable.
  • Curiosity. A great advisor is genuinely interested in understanding what’s truly meaningful to their clients. They ask probing questions to better understand their client’s views on money and life before creating a plan.
  • Quietude. A great advisor listens more than they talk. Active listening encourages clients to reveal their deeper thoughts. Great questions spark creative analysis and self-discovery.
  • Passion. A great advisor is driven to to do well for others. The desire to do right by clients compels great advisors to continue honing their craft and ultimately enhance the value clients receive.
  • Honesty: A great advisor sets realistic expectations about controllable actions and probable outcomes. Sometimes the best advice is not easy to hear, yet great advisors communicate essential truths about money and investing so that clients have realistic expectations about their wealth.
  • Discipline. Excellent advisors don’t let market swings or media messages drive impulsive actions. A prudent process is not distracted by the daily chatter of modern media.

Finding the Right Advisor: Key Considerations

With these guidelines in mind, a great place to start looking for the right advisor is to talk with a couple CERTIFIED FINANCIAL PLANNER™ professionals.

To find a CFP® professional near you, start your search here.

As you visit with financial planners, I suggest a couple things to check:

  • Is the advisor always the client’s advocate – a fiduciary advisor?
  • Is the advisor only paid by clients, not any financial product manufacturer or distribution network? That would be a fee-only advisor.

These two points help assure that you are working with a professional who is committed to your best interest at all times. It seems sort of obvious to me that a professional would work in this way, but it’s not automatic.

A fiduciary, fee-only, CFP® professional can help you make great retirement income choices and develop a comprehensive financial plan that is driven by your goals and priorities and addresses all aspects of your financial life. With a big-picture approach, you will be better prepared to understand your options at every step along the way.

Yes, I am a CFP® professional. I’m always a fiduciary and I only work on a fee basis. And yes, I’m still taking on a few great families to be part of my financial planning practice.

If this article has you thinking about your own circumstances, contact my office at rdunn@dunncreekadvisors.com. I am always happy to meet with people who are working on their retirement plans. Dunncreek Advisors does not provide legal or tax advice, nor is this article intended to do so.