All financial advisors are not equally helpful. In this episode, Michael and Anthony Pellegrino illustrate why your choice of financial advisor could guide — or derail — your journey into retirement. The advice you receive will set the foundation for your financial future; you need to make sure that the person you turn to for help has your best interests at heart.
As Michael explains, there are two primary categories of advisors. The first is a fiduciary. All of Goldstone Financial Group’s advisors are certified fiduciaries and are thus legally obligated to put their clients’ needs above their own financial interests. The second category of advisors holds to a suitability standard. Unlike fiduciaries, suitability-grade professionals do not consider the client’s long-term financial health. So long as the advisor deems a product suitable for the situation at hand, they can sell it — regardless of whether it will still be useful in five or ten years. The only way that a client can be certain that their advisor has their best interests at heart is to sign on with a fiduciary.
However, a fiduciary certification alone doesn’t guarantee that an advisor is right for you. As Michael and Anthony Pellegrino point out in this episode, a genuinely effective advisor has other positive qualities.
Good Listening Skills
Even the best-qualified advisors will fall short if they don’t bother to engage with their clients. They need to listen to their clients’ goals, acknowledge their concerns, and ask the questions that will give them enough context to establish a solid financial plan.
Accessibility
Advisors should be accessible — and yet, many retirees find it difficult to schedule an appointment that lasts long enough for their advisor to address their questions and concerns fully. This issue is particularly pressing at larger firms that have higher turnover rates for advisors. With these organizations, clients might cycle through advisors every six months, and never get a chance to build a long-term, trusting relationship with any one person.
Proactivity
We exist in an ever-changing market environment. Retirees need advisors who can be proactive and adaptive in good and bad times alike. If an advisor is reactive and only makes a move after circumstances have changed for the worse, they won’t be as effective as someone who acted preemptively.
To sum up — when you look for an advisor, search for a fiduciary that you like and trust!