Sophia Bera for the Street writes: If your financial planner cops a cocky attitude and parades a know-it-all ego, you should look for a new planner. Here are five planner comments you should beware of.
"I'm the expert, so just trust me." We in the financial industry suffer a lot of bad press. Financial planners already scrape the bottom in polls of professionals the public trusts. Yet many planners think that because you chose them you should blindly trust them.
They must earn your trust. You're the only expert in your own life. If you need $50,000 cash to sleep at night, that's what you need. I might ask about it, but the last thing I want is you up at night worrying about money because of my recommendation.
"I show that I'm smarter than my clients." This adviser tries to talk over you with financial planning jargon -- then gets upset when you question his recommendations. If your financial planner can't explain his recommendations so an eighth-grader understands, he probably shouldn't make those recommendations.
I want you to feel comfortable asking questions because it shows me you're engaged in your finances. I also have smart clients, with graduate degrees, law degrees and Ph.D.s, entrepreneurs running successful businesses. I don't think I am smarter than they are, because I'm not. I help them form a financial plan to put their money worries at bay and organize their financial lives. I see ways they save money, protect their assets and grow their net worth.
"What I do with your investments is a secret only I know." This stems from when people used brokers to make trades; it's still prevalent among investment advisers. Asset allocation is no secret: a mix of stocks, bonds and alternative investments that aims to balance risk and reward in your portfolio.
Investing also only makes up about 20% of comprehensive financial planning. If you work with an investment adviser who talks only about your portfolio without addressing your other financial planning needs, such as insurance, taxes or estate planning, switch advisers.
"My financial values are your financial values." Many planners project their own values onto you, making assumptions about taxes, charitable giving, helping your children financially and even your retirement. Your plan should be a roadmap for helping you reach your goals.
"It's not my job to educate my clients." No one cares about your money more than you. It's important you take ownership when working on your plan. A big part of my job is educating and talking to you about why you need one kind of insurance over another, how tax planning saves thousands of dollars and the importance of an estate plan.
The best financial planners educate, empower and encourage you. They work to understand your values, make recommendations in line with those values, explain the benefits of the recommendations and then help you implement the recommendations. You deserve a financial planner who understands you. It's your money.
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