Table of Contents
Introduction
Finding the right financial advisor can be a daunting task.
Investors who are not familiar with financial advisory services may find it difficult to separate the truly skilled financial advisors from the rest.
Although the job might seem complicated at first, it mostly revolves around a couple of basic traits and skills.
Luckily, there are certain traits of a great financial advisor you can use to determine whether your financial advisor is the right one for you, or should you keep searching.
Is Interested in the Client and Treats Every Customer Individually
So, what exactly makes a great financial advisor?
It’s not enough for an advisor to know the market and the numbers, he also has to know and be sincerely interested in people.
We all have our own unique investment style, time frame, and risk profile. It takes a lot of effort to get to know someone well enough to form a personal financial plan.
The advisor has to have a genuine interest in his client in order to paint a clear picture of what the client actually needs.
If you feel like the advisor is not paying enough attention to what you’re saying, it’s time to look for a new one.
We’re all individuals, so what works for me might not work well for you and vice versa. A great financial advisor knows what makes your investment plan unique and what solutions are the best for you.
The thing is that financial planning takes quite a lot of time and a huge amount of information. In general, you don’t gain information by talking, you learn by listening.
Listening Skills
One of the most important skills a financial advisor (or anyone for that matter) can have is listening skills. Listening is the key to successful investment advising.
The truth is that it’s impossible for the advisor to offer guidance if he doesn’t have a clue about what situation the client is in.
To learn what a person needs, you have to listen. A great investment advisor asks first, listens actively, and then talks.
In fact, the most important part of an investment meeting is the beginning, where the advisor gets acquainted with the customer.
Overall, it’s better to talk too little than too much. No one, in the history of the world, has probably accused anyone of listening too much. There’s a reason why we have two ears and one mouth.
It’s always worth keeping paying attention to the advisor while you talk and seeing whether he actually listens to what you’re saying.
Passion & Expertise
Passion for Wealth Management
Successful financial advisors know what’s going on in the market because they practice their craft with passion.
It requires quite a lot of effort to stay on top of things, which is a lot easier when the advisor really cares about what he’s doing.
Sometimes it’s worth making sure the advisor follows the market by asking about what he thinks of current events or the general mood in the market.
When your financial planner truly cares about what he’s doing, he also contacts you actively. The client-advisor relationship is one with active communication.
Expertise
To give relevant investment advice, financial planners should know how the economy and markets work.
Achieving expertise in any field requires a hands-on approach. A great financial advisor also invests himself and refines his skills constantly.
It’s also a matter of credibility. It’s hard to take advice during a bear market, for example, from someone who’s never been through one.
Expertise usually brings forth confidence. An advisor should be confident enough to give advice, but not overconfident about his skills. No matter how good someone is, it’s impossible to predict the future.
I believe that the best results in any field are achieved through constant learning. The great ones tend to usually read a lot.
One of the best ways to check whether your financial planner is serious about developing his skills is to ask whether he has any book recommendations for you.
Communication and People Skills
It should be made clear that being a financial advisor is not all about numbers. The field of personal finance is a combination of numbers and psychology.
Successful financial advisors have strong communication and people skills.
Communication
A great financial advisor knows how to communicate clearly. There’s no need for complicated professional language.
It’s quite hard to give relevant advice if the customer has no idea what the advisor is saying.
Sometimes the market can be a complicated place. A skilled advisor has a way of expressing complicated things in a simple and understandable manner.
Usually, when a professional stumbles in his words or doesn’t know how to express himself clearly, it is due to a lack of knowledge or expertise. When you know what you’re doing, you also know how to express yourself.
People Skills
If there is one skill that is universally important, it’s having people skills. A financial advisor has to get along with people.
People sometimes get quite emotional during market turbulence, which is why a great financial planner needs to know how to put himself in the client’s shoes.
If there’s one thing that separates AI and real financial advisors, it is the capability of building trust through social interaction.
When making big financial decisions, trust is key. We tend to trust and receive financial advice from people that we like and trust.
Now, some may argue that a financial advisor doesn’t need to be likable if he gets results. This might be true to some extent, but personally, I prefer people that aren’t complete asses.
Key Takeaways
A great financial advisor:
- Is interested in his client
- Treats every customer as individuals
- Knows how to actively listen
- Is passionate and has expertise
- Knows how to communicate and has people skills
