How to work with your financial advisors better?

How to work with your financial advisors better?

On the web, there are lots of comments from do-it-yourself investors who poo-poo financial advisors as mere salespeople who sell high commission products. Although there may be some truth to the statement, it’s important to realize that many people need financial help and not everyone is born to be savvy financial people.

This article is targeted to the many people who have financial advisors and would like to work better and more closely with them. I’ve run into many people in this situation.

Do you have the right advisor?

After being in the financial industry for 20 years, there’s one thing I know about financial advisors – Not all advisors are created equal. If you are not sure if you have the right one, this may be an opportune time to shop around and interview other advisors to get a comparative base. How would you know if you have a good financial advisor if that is the only person you have known? If you have been working with the same advisor for a while, ask yourself if your values are still aligned.

Call up your advisor to review your relationship.

That’s right . . . review your relationship and not your portfolio. The foundation of any relationship whether it’s marriage, friends, with your boss or your advisor is good communication. Often relationships break down when there is a breakdown in communication.

When you review your relationship there are a few things that you want to know:

  1. How much do you get paid to manage my account? Like it or not, financial advisors are in business to make money. That’s why it’s important to know how much they make from servicing your account? If they don’t make a lot of money, then you might understand why you may not be getting a lot of attention. However, on the other hand, if the advisor is getting paid a decent amount from trailer fees or service fees, then maybe you have the right to argue for better service. But how would you know where you stand from a purely economic perspective if you did not ask the question. If you ask, they must answer. It’s called fee disclosure and they must disclose their compensation to you.
  2. How often do you review my portfolio and how do you do it? The next important thing to know is their plan to manage your money. One of the reasons people hire financial advisors is to get help in managing the portfolio. If this is the case, then make sure you know how your advisor does this. Not only do you want to know how often this will be done but how it will be done. Ask about the process and the specific things that are reviewed. How do you determine good performance versus bad performance? How do you define and measure risk? What is your philosophy and strategies around asset allocation? How do you do investment research? What do you research? holdings? fees? tax?
  3. How are you going to improve communication? One of the things I hear frequently is that investors never hear from their financial advisors. Quite frankly, that’s not good! A key aspect of any relationship is good communication. If you feel you never hear from your advisor, stop waiting! Pick up the phone and call your advisor and ask for a meeting to review your portfolio. When you meet, tell the advisor you are not feeling the love and you want to develop a communication strategy. In the future, is the advisor going to contact you or are you responsible for contacting them?
  4. What kind of communication is most effective? Different people like to communicate differently. Which do you prefer? Email, phone, face to face? It’s important to have a discussion with your advisor about how often communication will happen but also what needs to be communicated and the most effective medium for communication.
  5. How many clients do you have and where do I fit in your practice? One of the issues that will affect your advisor’s ability to communicate and service your account is the size of their client base. If an advisor has 1000 clients, it would be very difficult for that advisor to call you and touch base with you very often. On the other hand, if your advisor only has 10 clients, you may also want to know if they will be in business over the long term or you might expect better service as a result because you are a pretty important client to that advisor.
  6. Can we review my retirement or financial plan instead of just the portfolio? My fellow blogger Ram at Canadian Capitalist feels too many advisors are not doing financial plans because they focus just on the investment portfolio because it’s how most advisors get paid. I could not agree more. I think one of the most important functions of a financial advisor is to develop good plans around retirement or from a holistic financial perspective. If you don’t think you have a financial plan, tell your advisor it’s time to do one. You have that right.

Even if you have an advisor it’s important to remember that nobody cares about your money more than you care about your own money. When you hire an advisor you hire them to help you and not just do everything for you blindly without any care or accountability. It’s important you work on the relationship just as you need to work on the portfolio.


  1. Vince Thorne

    I am trying to look for an advisor who will give advise and charge me by the hour. I think there is a terrible conflict of interest when the advisor stands to make money by earning a commission from your trades. However, it is hard to get good advise when you can only pay for a few hours a year. Commisions add up to a lot more.

    • chris stephenson


      Money coaches charge by the hour-

      Also, Registered Financial Planners often charge by the hour-

      Further, some CFP’s charge fee for service as well-

      In our experience, Scott Robertson from Tasman, Derek Moran from Smarter Financial Planning, Stewart & Kett group and David Christianson from Total Wealth Management have impressed.

      hope this helps, chris

  2. UltimateSmartMoney

    I realized that these financial advisors may be spending time with your account but as soon as they move higher or get bugger clients, they will leave you hanging very fast. You really have to stay on top of these advisors. This post lists very good tips on how to do that.

  3. dj

    1)5 to 15% on every product(sc) I sell you and ..05% on the back end per month 2)every time you give me new money to invest (every 3 months would be idea an maybe I’ll play golf with you) 3 an 4)email is best and a statement sent once a month,but maybe every 3months an you will still not understand it an don’t ask me…because some computer printed out an have not seen it. 5)ah this week your 221 but next week you could be 333 if I buy someones book(don’t ask how i found the money to do that) 6) sure ..if you bring your copy to are once a year sit down ,because i don’t keep copies… O&E insurance is for.

  4. David Leonhardt

    I suck as a do-it-myself investor. Advisers are definitely worthwhile.

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