March heralds spring cleaning: time to assess, organize, clean and purge areas you might have overlooked during the year.
P.S. Remember to include your financial adviser in that assessment.
As the seasons change and the years pass, your financial needs and goals change, too. Your financial gameplan should be adjusting as well, with investments and strategies tailored by a person who understands your unique situation, says Hillary McGrail, senior relationship manager at King Financial Network in New Canaan.
“There can be 100 people in a room, and each person has had their own individual experience with finances, money and financial matters. It’s very personal,” McGrail says. The adviser’s job, she notes, is “making sure we understand everything that’s important to you in your financial life.”
When that’s not happening, it could be time to cut the cord.
How can you tell if your adviser is lacking? Look for the red flags, she says. McGrail spent the early partof her career guiding institutional investments and advisers nationwide before migrating to the client side. The switch proved eye-opening.
Prior to moving to King, she witnessed so-called advisers talking down to their customers or ignoring one partner over the other, only to backpedal when an unexpected money event, such as a big tax bill, arose.
“Red Flag No. 1: lack of communication and attention,” says McGrail. Good advisers reach out at least quarterly, even if that’s just with an email or a phone call to touch base. During meetings, your adviser should be “doing a lot less talking than you. You should be conveying what’s important to you, what’s new with you.” If your expert is doing more talking than listening, McGrail says, maybe it’s time to move on.
Red Flag No. 2: leading with a product instead of a query. When you buy something from your advisor and they make money, that’s transactional, not personal, and “it’s still the way many advisers are trained,” McGrail laments.
That leads her to Red Flag No. 3: lack of transparency and clarity on what you own and what your fees pay for. If you don’t know, it’s time to ask. Be upfront with your questions, McGrail recommends. Say “I don’t know what I’m paying for. What is the cost to me? How are you compensated? How does your fee structure work? Where are my assets held?”
Your adviser should be forthcoming with these answers and have a team of experts—CPAs, estate attorneys and more—at the ready to help provide a holistic approach. At the end of the day, you—and they—should understand your risks and market exposure, your cash flow needs and upcoming goals and your plan for reaching those goals.
Breakups don’t happen fast. Steps leading to a split might include high fees, bad customer service, lagging portfolio performance or simply your money manager’s complacency, especially when the market performs well and gains seem to come on autopilot.
The average age of a financial adviser is 51, according to Integrated Financial Group. If your adviser is on the golf course instead of talking you through the financial challenges keeping you up at night, McGrail says, wave your own flag goodbye.
Hillary Ambrose McGrail
BEFORE THE BREAKUP
Before you cut the cord with your current adviser, consider your next move: will you do it yourself or go with a robo plan? Or enlist the services of a money manager who actually serves you? Ask people you know and trust for recommendations. Do your homework and arrange some interviews. In your meetings, is the potential adviser really listening to you and asking about your fears, hopes and dreams? If not, keep moving.
Once you find someone new, that person can transfer your investments and take care of the paperwork, without you ever having to say goodbye to adviser No. 1. “If it’s someone close in your network or community, you can be gracious and say, ‘Thank you. You’ve helped us so much,’” McGrail says.’” But you don’t have to.