Test the Trustworthiness and Competence of a Financial Professional

Do you remember John Elway, the great quarterback for the Denver Broncos? Let's say that in the prime of his career, he stepped into the huddle and nobody knew who he was. Do you think the players may somehow sense his professionalism anyway? I think so. He would not have to tell them all about himself, his credentials and his accomplishments. Instead, he would just simply be John Elway - he would take charge and tell them what to do. They would get it, don't you think? Their instincts would lead them to do what was instructed - because he's the professional - they can just feel it.

People who are pros in any field don't have to spell it out. When it comes to a potential financial advisor, you can tell by the advisor's behavior whether she knows what she's doing - or not. Just like John Elway, a trusted advisor's competence and trustworthiness will likely be demonstrated by behavior, delivery, and follow up.

As you search for the right advisor, don't be too hung up on designations. Sure, they may be important, but they surely don't tell the whole story. Advisors who have a lot of letters after their names aren't necessarily more trustworthy. Additionally, just because someone has been in the business for a long time doesn't necessarily make him or her stellar. Someone once said that few people have 25 years of experience; they just have had one year of experience 25 times! Again, be careful with generalizations.

Also, don't rely on the size of the firm that the advisor represents. Big does not necessarily mean best - you may get lost in the shuffle. Conversely, you do want to be sure that the advisor does have the resources, back up and expertise to do the job.

You have to use your sixth sense and other criteria as a backup. As I said about John Elway - you know when you are in the presence of a pro.

Initially, you should have an interview with the advisor you are considering. This should be such a good experience for you that you hire the advisor to create your action plan, invest your money, stop working with other advisors, do what the advisor tells you to do and share the good news with your colleagues, family and friends.

When you meet with a "trusted advisor," you feel great. When you meet with a salesperson you feel worn down. When the meeting is over, do you feel good? Do you feel inspired? You also want to look for an advisor who is not too eager to take care of your money. You really want to stay away from someone who seems too hungry. And you want an advisor who has the confidence to tell you the truth. "Tough love" is a plus in this profession. The advisor should be able to act as a coach and guide as you work toward your goals - the achievement of which allows you to fulfill your values.

For the initial interview (by the way, the advisor should be interviewing you!), the advisor should require that certain things occur:

1. Your spouse or financial partner should attend the initial interview with you. This will ensure that there is a good "fit" for all. Although the financial decisions may be made by one of the partners, this discussion is about your future. If you have a future together, it's important that both of you are present for the initial discussion.
2. You should be asked to bring all of your financial documents to this meeting. It's like bringing your teeth to the dentist. Financial documents are to the advisor's work what teeth are to the dentist. When you go to the dentist you bring your teeth. If you are sincere about getting advice from a financial advisor, you bring your documents. You should only share the information contained in the documents when you feel comfortable doing so.
3. You should be meeting at the advisor's office. This is the environment that will provide the most value for you. You will be focused and not distracted by outside influences.

A great advisor may want to audiotape the meeting. Don't be surprised. This is a sign of a very detail-oriented advisor. Have you ever watched a movie a second or third time and seen things that you missed the first time? Well, the same holds true for the initial interview. A great advisor tapes the interview so that she can listen to the tape again and again to make certain that she doesn't miss anything. This isn't a sign of Alzheimer's; it's a sign of thoroughness and commitment to do the best possible job for you.

During the interview, you should know that as you are evaluating the advisor, she is evaluating you. She will be assessing whether you are the kind of person who can genuinely be helped by his/her services.

So, does there seem to be a "fit" between the advisor, the type of person the advisor is seeking and the type of advisor you are seeking, and you? Is this someone you feel you can trust? Do you feel that this is someone you could work with?

There is a difference between a trusted advisor and a salesperson. For those of you who may be considering an advisor, you should be aware of this fact. For those of you who already have an "advisor" you should ask yourself, "What are my advisor's intentions?" How much are the right financial and investment choices worth over a lifetime? How much do the wrong choices cost? Aim high! After all, a really great advisor should have only one person in mind - you.