Trusting Your Advisor

Receiving investment, tax, or planning guidance is an important way for some people to develop confidence about how they are handling their money.  As you work with a Financial Advisor, developing a sense of trust that they are working on your behalf and are competent at their profession will go a long way towards helping you implement their advice.

However, if you are looking to develop a healthy relationship with an advisor, I would suggest that you develop standards for the level of information and education you receive.  I was trained at my prior firm on how to “connect” with my clients as a way to develop trust.  I was taught that if I learn what my clients’ real values are, if they open up to me, that they would trust me and then invest with me! I think this is a common practice in the financial services industry – train advisors to connect on an emotional level with clients.

I fully support the notion of getting to know the people that I work with and how their experiences form their attitudes and their goals.  But it should not be done as an alternative to fully educating clients as well.  I do not support advisors abusing the trust clients have placed in them and downplaying product features their clients may question.

The products that you invest in, and their costs, matter a lot to your financial success.  I would suggest that you make sure you fully understand:  1) what you are investing in; 2) the costs of the investments; 3) exactly how your adviser is compensated; and 4) how much total compensation they receive.

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