You’re not alone in wanting to switch financial advisors. A 2015 poll showed that 60% of super-high-income earners and 51% of mid-range-income earners switch financial advisors at least once, so mixing it up can be a good thing. Here are a few warning signs to pay attention to:
1. Sporadic Communication
Bad communication from your investment advisor is a big red flag. It’s one thing to have a question or issue that needs to be taken care of, but it’s a whole other thing to not have consistent contact with them.
You shouldn’t have to constantly wonder if your investments are being taken care of. You’re a paying client, so it’s their responsibility to reach out to you, to see if you have questions, issues, or just want to chat.
Handing over your money and financial life to someone else is scary! Make sure the person on the other end understands the importance of keeping the lines of communication open.
2. Lack of Transparency
In order for your financial professional to accurately help you reach your financial goals, you’ve got to be open and transparent with your money. Likewise, they need to be just as transparent with how they run their business and their investment strategies.
How do they earn money off your investments? Are they partners with any of the funds? Do they participate in revenue-sharing?
These are the types of questions you should ask, and your financial advisor should be more than happy to answer.
Sometimes it comes down to a gut feeling, so if you don’t feel comfortable with them, or you don’t think they are being honest and transparent about how they handle your money, it’s probably time to find a new financial advisor.
3. Differences in Ideas and Goals
We all have our own financial goals and aspirations for building wealth. This is something you and your investment professional need to be on the same page about. If there are too many philosophical differences between both of you, that’s a recipe for disaster.
Does your advisor believe in taking more risks? What’s their personal investment strategy? Do they invest emotionally or have a level-head?
If both of your beliefs don’t match up, and your investment advisor doesn’t understand your goals about saving for the future, it will be difficult — maybe even impossible — for them to properly manage your portfolio.
If there are too many differences in philosophies and strategies, it’s time to seek out a new advisor.