Three Signs Your Advisor is Putting Your Best Interests First (And One Red Flag to Watch For)

July 20, 2021

With hundreds of thousands of finance professionals across the U.S., you can certainly google “financial advisor near me” and find plenty of choices. But how do you know if your advisor is really looking out for you?

If you are working with someone who is a fiduciary, that’s a great start. A fiduciary, by definition, is obligated to act in your best interest. Advisors that aren’t a fiduciary are simply required to believe their advice is suitable based on what they know about you. Make sure you ask the question: Are you a fiduciary?

Beyond that, here are three signs that your advisor is putting your interests first, and one red flag to watch for.

They Ask Many More Questions Than You Expect

The rate you are paying on your current mortgage isn’t a necessary data point for building a financial plan or structuring a diversified investment portfolio for you. But it is a critical data point to stay on top of if you want to be proactive about debt management.

Advisors that provide truly comprehensive services will ask you for much more data than you think they need. In fact, you’ll be surprised at the number of questions they have for you initially and over time.

Every Detail Matters

That’s our motto at Heritage Financial. And those aren’t just words. We have a 100 point+ checklist of data points that we collect at the onset of our relationship with a new client. We monitor these points proactively to make sure we are always up to date and can act quickly as changes to laws or the markets open up risks or opportunities.

But there’s more.

We believe that maintaining and monitoring this level of detail is so crucial to the effectiveness and success of your financial plan, that we have tied the tracking and updating of this information to the goals and incentives of our Financial Planning and Wealth Management teams.

They Don’t Just Help You Earn – They Help You Keep What You Earn

When it comes to growing your investments, there’s more to it than just earning strong returns. Risk is important, and time can be an asset or a liability. You want an advisor that can maximize returns for a risk level that makes sense for you, and over a timeframe that is consistent with your overall plan.

But using strategies that help you keep more of what you earn over time is just as important. Fees, taxes, sustained capital losses, and opportunity costs are all factors that can derail your financial plan.

At Heritage, our investment approach utilizes several strategies to help our clients keep what they earn, including:

  • Low-cost, institutional pricing
  • Low turnover and asset location strategies to minimize tax impact
  • Value-based approach to equity investing to help us avoid overpaying for an investment
  • Robust trading platform to manage cash efficiently and keep every dollar earning

They Become Your Professional Worrier

Worry can lead you to overreact: trying something – anything – to solve the thing you are worried about. But it can also stop you dead in your tracks, leaving problems unsolved. Both can have bad outcomes and will likely keep you awake at night.

Your advisor can be objective about the situation that has you worried. Their job is to wrangle all the moving parts of your financial plan. To organize the important “to-dos” into checklists with deadlines and clear areas of responsibility.

As much as you might like the idea of completely handing off the responsibility of your finances, an advisor that is truly looking out for your best interest will be honest with you about where they need you to be engaged. You should expect your advisor to:

  • take as much off your plate as possible
  • give you a gentle nudge to do the short list of tasks that require your input
  • insist on knowing your other important advisors, so they can collaborate openly without needing you to be the switchboard for important conversations
  • save you time and worry

At Heritage, we end every client meeting with Next Steps. Our clients don’t always have take-aways. But when they do, we have reminders to check in and give that gentle nudge to make sure we are all staying on track. We work openly with your other advisors. We worry about all the small details and how they roll up into your full financial plan.

You focus only on those to-dos that require your input.

The Red Flag

An advisor that is laser focused on your best interests will make sure you are engaged. But if they aren’t engaging your spouse or partner, it’s a clear red flag.

Let’s be honest – the scenario that occurs most often is that a male advisor is working closely with a husband on the finances, with the wife deciding how engaged she wants to be. This isn’t always the case. More and more we see households where women are controlling the finances. And in those cases, the husband may be less engaged.

No matter the division of financial responsibilities, we believe it is critical to ensure that all parties are engaged in conversations about financial goals, the plan to get there, where assets are located, and what happens when major life events occur. There is no worse scenario then the unexpected death of a spouse (or divorce) leaving the survivor in a state of confusion and panic because she or he knows little about the finances.

Our HER Heritage initiative is just one way we are focusing on making sure conversations with our clients are inclusive and educational for all family members.

Wondering if We’d Be a Good Fit For You?

Learn more about how you can test-drive a relationship with Heritage Financial at no cost to you in the video clip below. If you’d like to talk to one of our Wealth Managers, contact us here.

Kristin Castner, CFA

Kristin Castner, CFA

At Heritage Kristin is responsible for overall marketing strategy, with a focus on communicating the firm's message to clients and prospects and creating outreach programs to engage clients, partners and prospective clients.

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