Signs That Tell You It’s Time to Change Your Financial Advisor

Kimberly Watson, Editor in Chief
May 16, 2012 /

A relationship between a client and a financial advisor is established over a period of time, with mutual trust as the foundation. However, it does not always work out like that! This type of relationship is similar to that of doctor and patient; open and honest.

Before establishing a client – financial advisor relationship, research should be conducted on various aspects relating to the character of the person and their business reputation and qualifications. A financial advisor should possess a Form ADV, filed with the SEC. in their name and that of their firm, with the appropriate broker’s license. It is also wise to enquire about their compliance and any overseeing of their business.

An experienced, qualified financial advisor can be expected to remove the fear and emotional aspects from investment. A problematic situation could arise in the relationship, when there is cause for doubt or mistrust, no matter in what connection, or to what degree. Generally there are indications that it is time to change your financial advisor.

If a financial advisor is unable to determine a client’s financial goals, they cannot establish a portfolio strategy for their achievement.

A client depends on sound advice from a financial advisor. Should there be an occasion whereby a decision is made, resulting in you losing money and seems more in the interests of your advisor, it is time for some revision. This may have been revealed by a knowledgeable friend or another advisor. No matter the intention, poor advice is a cause for loss of confidence and trust and could be a breech of professional responsibility.

A financial advisor must know a client’s needs and aspirations. Investments may be complicated and it is crucial that a client is made fully aware of any strategic decisions and have the opportunity to ask questions. Therefore, communication is essential in all respects.

The client pays the bills and is taking the risks. Therefore, they are entitled to information and when required. A financial advisor should respond to a client query within 24 hours, even if it is just to update with progress. Frequent portfolio updates should be standard procedure.

It is critical that a client understands the fee structure of a financial advisor. It is an obligation on their part that fees are disclosed and business is conducted with full transparency.


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