Last week I attended a one day conference for investment advisors by a major brokerage (not the one I use for my clients). The title of the conference was “Best Practices”. Frankly it bothered me that in and among the ‘best practices’ were discussions about how to raise fees, how to get rid of unprofitable clients, and how to get the most for you business when you put it up for sale. But darn little was said about how to provide good service to clients, helping them keep their money safe, meeting financial goals, etc.
This got me thinking about what the average person could do when choosing an investment professional to work with, to see if that investment advisor is putting the client first. The best way to do that is to have uncensored conversations with existing clients. Talking with 3 or more current clients and asking the following questions to see if that advisor will be in your corner (I’m using the term ‘advisor’ for brevity, but it could be a broker, money manager, or financial planner):
- Does the advisor seem ethical? Is there anything he/she has done that seems a little flaky?
- Does the advisor listen?
- Does the advisor treat the money like a bunch of generic assets? Or more like the carefully acquired life savings of the client?
- Does the advisor try to shoehorn the clients into one of 3 or 4 investment styles (i.e. growth, income, growth and income) or is it custom management for each client?
I think getting answers to those questions (along with obvious ones about performance, fees, etc.) goes a long way toward finding out if the advisor has ‘best practices’ that are best for the client.