What Should I Look Out For In A Financial Advisor?

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Just recently, it’s been reported that thousands of financial advisors were hired just during the COVID-19 pandemic across a variety of companies, whether it's insurer companies or banks. You don’t need to look far and wide for one because they are everywhere! From the recent university graduate to the next door aunty: you name it, you want it, you can find it. Some of you may even need your fingers and toes to count the number of friends in your circle who are financial advisors.

The need for a financial advisor cannot be overstated. It’s always more assuring to run through your financial goals with someone. Also, who can live their lives without a proper analysis of their financial position? Who will want to settle their insurance claims themselves (if they are even able to) in the midst of a medical crisis? Who can offer advisory on which investment vehicle works well for them? With all the different types of plans out there with different features and benefits, who is to walk us through the suitability of each plan? That’s the role of the financial advisor.

Yet, the saturation of advisors and competition in the industry can be unnerving for many. It doesn’t help that there is a stigma that comes with it too. Admittedly, the stigma that comes with financial advisors is not entirely unwarranted. Some rotten eggs, some bad service experience and you wonder if you can have any more faith in the industry anymore.

That being said, a few bad apples won’t spoil the entire crate. For example, you won’t let the latest news report of medical malpractice from Doctor XYZ stop you from visiting other doctors if you’re sick, right? That same logic applies too. The key question, then is, what do you look out for in a financial advisor? Here are some of traits and practical things to look out for:

1. Character

Thanks Captain Obvious! But everything about ethical financial planning lies here. Using the same analogy with doctors: You go to a doctor, you trust that the medication, treatment and advice given are beneficial for your needs. You trust also that the prices are not exorbitant just to line their pockets. This applies with financial advisory as well.

You have to know that this financial advisor works within the sphere of personal ethics and he/she is offering you advice and pitching products that truly meets your needs. Everyone deserves to be paid for offering a service. The key is to know that what you’re paying is truly beneficial for you.

There are generic industry-accepted advice and standards that lends context as to which products work best under which environment (though it’s not a one-size-fits-all answer all the time and again, it’s contextual) that you can always refer to online as well and platforms like the Seedly Q&A is always helpful ;)

2. Expertise/Knowledge

I lumped them both together because in many cases, information (knowledge) is pretty useless unless it’s applied (expertise). For starters, your financial advisor should have a reservoir of knowledge with regards to the different areas of financial planning. What are the different income protection plans? What are the different investment vehicles? Which fits my budget well? The context here is how do the different instruments actually fit into the narrative of your life.

One man’s meat is one man’s poison and it’s not enough to just pick either the cheapest or least complicated product. There are different products for different needs, budget and time horizon and it’s up to the knowledge and expertise of the financial advisor to provide a curated solution for you.

There is also a huge distinction between financial advisory and product dispensing. This means that the advisory offered shouldn’t be limited to products tied to the advisor’s company. For example, your financial advisor who does investments should be able to advise further on what are the other investment instruments out there.

As a side note, this is imperative when purchasing investment plans through a financial advisor. Your financial advisor MUST be well-versed with the ins-and-outs of the investment arena. The problem sometimes isn't with the investment plan but it's with the advisor. Give a knife to a chef and he can whip up a dish with it. Give it to a baby and you have disaster.

There are financial advisors who make a living by merely selling insurance, which is not a bad thing. Investment is another skill set altogether. But it can be disastrous to allow a financial advisor who isn’t investment-savvy to handle your investment portfolio with them. Typically how you’ll know this is through the variety of investment portfolios that the advisor handles. Which brings us to the next point:

3. Service

This can be seen in two areas: investment and insurance-related service.

As mentioned earlier, investment service is usually related to portfolio handling. Is your financial advisor active in tracking your portfolio’s progress? How is he/she handling your fund switches and is he/she able to account for why he/she is doing it? Is he keeping his clients up-to-date with their investment portfolios with them? It’ll be helpful to know the kind of systems the financial advisor has to ensure you know how your investments are doing?

Insurance related service will usually relate with claims and responsiveness to any needs or queries you may have. Is the advisor prompt and responsive? Is he/she familiar with the claims experience? It can be frustrating if your advisor goes MIA if you have a real need. This is typically difficult to assess at the start and hence, word of mouth is a very powerful way to find out if the financial advisor can offer a service that’s satisfactory. But one way you can find out is through the advisor’s prospecting platform. Whether it’s through Facebook page or their Instagram accounts, are there any reviews or testimonials to back up the advisor’s service?

4. Relatability

This may not be important to some as financial planning may be a purely transactional experience for them and that's fine. But for me, this will be one of the most important traits. The reason is because your financial advisor will likely journey with you through many different milestones, whether it’s your marriage or first born or during unfortunate events like the passing of a loved one. Whether it’s in the form of an encouragement or a gesture of empathy, you know that your advisor has got your back.

You can potentially sort out your financial needs just by buying the necessary products and voila! But there’s significance in the human touch because it's just the way we are wired, as relational beings.

This is subjective but the more genuinely relatable advisors are also typically able to offer products that they themselves either have or will buy and they know they can sell without searing their conscience. I mean, no harm also asking what do they have in their portfolio #justsaying

With all professional boundaries kept, a budding friendship with your advisor also means you can reach out to him/her without feeling paiseh about it. I mean it’s always easier to reach out for help to a friend than a stranger la!

Relatability is important also because no one wants to deal with a transactional, greasy and opportunistic person who’s out solely to profit. You get what I mean.

There you have it! Some of the traits I believe are what you should look at in a financial advisor. Financial planning is, and can be a very rewarding experience, both for the consumer and the advisor. And as you attempt to find that right person, you may find that what you’ve found may not just be an advisor but a potentially all-weather friend. :)

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You can follow me @gethsemanefinance on Facebook or IG and reach me to find out more about why I do what I do.

Gethsemane is a word-play for Get-Some-Money. However, money should not be accumulated for accumulation sake. I hold onto this philosophy by Francis Bacon: Money is like manure, its only good if you spread it around.