Ten Warning Signs of Working with the Wrong Financial Advisor

Are you working with the wrong financial advisor? Is he still the advisor best qualified to help you meet your retirement goals—and to do so with confidence and peace of mind? It’s a crucial question, so we’ve compiled a list of “10 Signs You Might Be Working with the Wrong Financial Advisor” to help you decide.

1. Your advisor ignores your changing temperament
Have you asked your advisor to make your portfolio more conservative only to have him or her fight you on it? This is a major red flag. Most people want to invest more conservatively as they get older, and understandably so. If your advisor is pushing back, it could be because he isn’t qualified to manage a truly conservative, income-generating portfolio—or it could be because he has a financial incentive to keep your portfolio the way it is.

2. Your advisor isn’t a fiduciary
To expand on the point above, have you ever felt as though your advisor doesn’t put your interests ahead of his own? If so, it might be time to work with a fiduciary. A fiduciary is held to the highest regulatory standards of professionalism and accountability and is legally obligated to always put his clients’ interests first.1 While all advisors are subject to regulatory rules and guidelines, not all are held to the standard of a fiduciary.

3. Your advisor uses prefabricated, or “cookie-cutter” strategies rather than customized portfolios
Many brokers and advisors are compensated on a commission-only basis, which means they make money by selling “prefabricated” financial service products like stock mutual funds or bond mutual funds. These advisors often work for large, well-known companies. Some other advisors might receive a fee for punching your information into a computer to generate a “cookie-cutter” type financial plan for you—one that includes a prefabricated product, for which they will also collect a commission.

By contrast, an advisor who specializes in retirement income typically has no financial incentive to recommend a prefabricated product, nor does he believe in using computer-generated “cookie-cutter” strategies. His specialty is working with each client to help create a customized portfolio geared toward the client’s situation, goals, and risk tolerance level.

Report Download

Download your free reports on the financial topics that matter the most to you.

This field is for validation purposes and should be left unchanged.

Secure Document Upload

Upload documents securely.

  • Drop files here or
    Max. file size: 10 MB.