Investing

Measuring Up

Not All Financial Advisers Are Created Equally

In the world of wealth management and financial advice there are many options. Some financial advisers are advisers in title only with little to no meaningful relevant training and/or experience, are effectively salespeople of their respective companies’ products and have no legal obligation to act in their clients’ best interests. Other advisers have completed rigorous training via classes or certification processes, have extensive relevant experience and are legally required to act in their clients’ best interests. Which of those two advisers would you rely upon to help you plan for and work towards your life and financial objectives, including financial security?

It’s Complicated

The world of financial advice and wealth management is rife with conflicts of interest, high fees and client interests being subordinated to other interests. In evaluating the suitability and potential effectiveness of an adviser, many factors need to be taken into consideration. We touch on several below in no particular order:

  1. An advisor who is a fiduciary has a legal obligation to act in clients’ best interests. Remember, it’s your money and your financial future that are at stake. You want an advisor that is going to put your interests above all else to ensure the most favorable outcome possible.
  2. Depth and breadth of knowledge are critical elements that should be on everyone’s list of requirements for an advisor. You want someone who knows what they’re doing but who also has a knowledge repository from which to draw when she/he encounters something new or unexpected.
  3. Expertise in two particular areas especially, investments and investor psychology, is essential. Regarding investment expertise, you want to work with an adviser who understands how investment markets function, how different investment vehicles work in isolation and together and follows and implements rigorously proven investment principles. Advisors who understand investor psychology and know how to properly manage behavioral tendencies as it relates to emotion, making decisions and working towards long-term goals are highly valuable and should be seriously considered.
  4. Advisors that possess the above-mentioned attributes and charge lower fees relative to other advisors are the gold standard. Your goal should be to keep as much of your principal and returns working for you, via compounding, as possible.

There are other elements to consider such as perspective and investment philosophy. Those are unique to each advisor and should be carefully evaluated to ensure they line up with your values and expectations.

Summing it Up

Not all financial advisors are created equally. Some are very well versed and prepared to meet your needs. At my firm, Glacier Investment Management, you get advanced expertise, depth and breadth of knowledge and experience and a commitment to provide our clients with the best solutions possible for their individual situations. If you’d like to learn more you can contact us here.