Personal Finance

6 Steps to Navigate 'Hire or Fire' Season and Find Your Ideal Financial Advisor Match

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By Tammy Trenta, MBA, CFP, CTC, CEXP; Founder and CEO - Family Financial

Imagine being in a committed relationship when, out of the blue, the person you are seeing stops paying attention to you. Worse yet—they “ghost” you. Now imagine the same person calls a year later, as if nothing ever happened—and with no explanation. Perhaps your emotions would range from confused, to insulted, to furious.

Oh, now you want to talk?

Feelings like this would be expected. After all, no one likes being put on a shelf. These emotions extend to our business relationships, too. In the world of financial advising, January is what we like to call "hire and fire" season; a time when many clients—feeling neglected after a year of little to no attention—re-evaluate their relationships with their financial advisors. Often, they decide to cut ties and start fresh.

Like a clueless ex, jilted advisors are left stunned and stumped, wondering where they went wrong. Below are the top reasons so many clients start the year with, “it’s not me, it’s you.” And if you’re in the market for a new financial advisor, we’ll cover the steps you can take to start your relationship off the right way.

1. Spotty communication

As in any relationship, communication is the key to building a strong bond between you and your financial advisor. You deserve an advisor who maintains a connection, keeps you in the loop, and holds your hand when times get tough. Annual planning reviews in addition to regular updates should be table stakes. And a good advisor never forgets the important details that can have a significant impact on your financial wellbeing. 

For example, does your advisor remind you to make your retirement contribution prior to the deadline? Do they help you navigate major events (like a job change, a death in the family, or a new marriage)? Do they often remind you to review beneficiaries for life insurance and retirement plans? Just as you'd expect regular communication in a relationship, you should expect your advisor to have a process in place ensuring frequent check-ins that will help you both avoid mistakes.

2. Letting you ride the roller coaster alone

Relationships have their ups and downs, and so does the market. Financial advisors should demonstrate they care by helping you buckle in and hold on when things get bumpy—especially during nausea-inducing market downturns. Providing trusted guidance and reassurance is crucial to keeping the relationship intact.

You should expect your advisor to be proactive, calling you when the market is down, sending updates, and being available to talk when you are worried. Your advisor should be intentional about communication, just like in any relationship.

3. Poor service quality

A great partner will try to understand you better than you understand yourself. Imagine if you went to your doctor for your annual physical, and your doctor checked the boxes without asking how you’re feeling, or if you had any health concerns. Chances are, you’d feel undervalued. Similarly, annual financial reviews should be personalized; centered around you instead of a form. 

Granted, quality reviews are a big time commitment for advisors. Still, they are essential. Throughout the year, you should also hear from your advisor about general housekeeping to ensure they have updated information to provide the best advice throughout the year.

4. Misaligned values 

Everyone wants to feel heard in a relationship, and it’s ideal when a partner can understand and appreciate your values—better yet when those values are aligned. The same applies to financial advice. Finding an advisor who “gets” you and can relate in some way to your life experiences and your unique financial situation sets the stage for smoother sailing.

5. Broken promises

This can be the death-knell for any relationship. In advising, it’s about managing expectations—under-promising, and over-delivering. When your advisor fails to meet a commitment, it’s a signal your needs aren't a priority. 

6. Poor value

Lastly, in shopping for an advisor, be sure to analyze the cost versus the value. Financial advising fees vary, but you need to consider what you’re paying for and whether it aligns with what you’re looking for. If all else is equal, why not seek more value for your money? It's about finding an advisor who provides the right balance of expertise, service, and cost.

The best relationships are built on trust, communication, and mutual respect. Knowing just what you want and finding someone who can understand your unique needs, and provide tailored advice to get you to your goals is what it’s all about. It’s (not) complicated.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Tammy Trenta

Tammy Trenta, MBA, CFP, EA, CTP, is the Founder & CEO of Family Financial, a wealth management firm based in Los Angeles, CA. With 25 years of industry experience, Trenta believes in a holistic, 360 degree approach to wealth and financial management, integrating financial, tax, and legal guidance to help clients accelerate their wealth and keep more of what they earn. Family Financial (FF Advisors, LLC dba Family Financial) is a registered investment advisor.

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