For Women, Finding The Right Financial Adviser Is Key To Financial Peace Of Mind
By Ali Phillips, Executive Vice President and Partner, Obermeyer Wood Investment Counsel
When it comes to wealth management, finding someone who cares as much about your money as you do is an important part of the picture. This is especially true for affluent U.S. women, who continue to earn and are responsible for a growing share of investable assets. Women are also expected to inherit trillions by the end of this decade as part of the enormous transfer of wealth taking place among baby boomers. Given how many roles and responsibilities women often juggle, you deserve to have an advisor who has your best interests at heart and wants to help you successfully traverse life’s unexpected twists and turns.
Whether ramping up a career or selling a business, planning for retirement or budgeting college expenses, navigating a divorce or formulating your estate plan, any significant life event that you experience is certain to have a substantial financial aspect. For that reason, it’s important to empower yourself by establishing a solid relationship with a financial advisor who can serve as a sounding board and help you strategically think through complex decisions as life evolves. Generally, it is better to find this partner now versus waiting until you are facing a significant life event.
Below are some things to keep in mind when looking for, and working with, the right financial advisor.
1) Work with someone you like and trust.
As you go through a period of transition after a significant life event, you will want to lean heavily on the advice and guidance of your financial advisor. Whether positive or negative, the unexpected usually comes with heightened emotions, additional stress, and important decisions that often need to be made quickly. The role of your advisor during these times will be that of a level-headed, strategic partner. The nature of this partnership will entail talking about a range of complex issues, many of which can be intimate or uncomfortable. Conversations will likely touch on things such as values, family dynamics, and feelings about money. For this reason, you should work with someone you trust and respect – and most importantly, will encourage you to be honest and open.
Working with someone you like does not mean you need to be best friends with that person. It simply means that you like them enough to feel comfortable picking up the phone or meeting with them to discuss important financial decisions that can affect your and your loved one’s futures. Working with an advisor you respect and innately trust is equally important since any solid advisor will likely provide advice or suggestions that may not be what you want to hear at that moment but that they feel is in your best long-term interest. Mutual respect and candor between you and your advisor will go a long way to help you get through tough times.
2) Find an advisor who will focus on the details and deadlines.
Periods of financial transition often include things like transfers, paperwork, signatures, and deadlines. These processes can be complex, and they don’t mix well with the emotional toll that life’s ups and downs can cause. Your advisor and their team should be proactive about understanding the details and deadlines associated with your financial situation and be doing their best to keep everyone on task so that you can focus on your well-being during stressful times. Your advisor can only do so much to predict your needs, so it is crucial to communicate your situation and wishes to your advisor to help them make sure that they see your entire picture.
3) Work with an advisor who will speak to you in plain English.
Life is complicated enough; why make it even worse by working with an advisor who uses financial jargon? This suggestion is straightforward: Work with someone who can communicate effectively in language that is easy for you to understand. It is paramount that you walk away from each interaction with your advisor feeling like you understand their guidance and counsel. When you don’t understand something, be sure to ask questions. If an advisor can’t explain things with terms and ideas that you relate to, they are not doing their job. When it comes to your financial life and well-being, the stakes are too high for you not to be listened to and fully informed.
4) Understand what services the advisor offers.
The term “financial advisor” can mean different things to different people. Before you go any further in your relationship with your advisor, ask them to provide you with a list of services they offer and any corresponding fees. You don't want to assume that your financial advisor is taking care of your overall financial strategy, only to find out that they focus only on one piece, such as investing your assets, while ignoring another element, like retirement planning. A solid advisor will offer a suite of services that complement most, if not all, pieces of your financial life. They should also be able to provide referrals to other trusted professionals, like accountants and estate attorneys, who can provide you with any services outside of their purview.
5) Work with someone willing to coordinate with your loved ones and other trusted professionals.
After major life events, you will likely work with a team of experts as you transition to your next phase. There is also a good chance that some family members will be involved in either settling ongoing financial matters or planning for the future. It would help if you worked with a financial advisor who is willing and eager to coordinate with your entire team and family members.
6) Work with a fiduciary
A financial advisor who operates as a fiduciary is ethically and legally bound to act in your best interest. That means your advisor will manage your assets to primarily benefit you, not them. Advisors who operate under this standard are also required to avoid and disclose any conflicts of interest while working with you and your assets.
When interviewing an advisor, ask them directly whether they are a fiduciary, and make sure you understand how they are paid for their services. It can be as easy as asking, “How do you make money?” A solid advisor will be transparent about their fees and happy to answer that question.
7. Once you’ve found the right adviser, schedule regular checkups.
Just as you see a doctor and dentist regularly, make time on your calendar once a year or so for “financial wellness” meetings with your advisor. Use these sessions to review your overall financial health, discuss any personal and economic changes that might affect your overall strategy, and ensure you stay in touch and on the same page so that you can continue to meet life's challenges with confidence. These check-ups can be quick; you are busy, so make sure your advisor can cover the critical points efficiently. Good advisors can generally tailor the length and frequency of such meetings to meet your schedule and stage in life.
Making Your Decision
After evaluating an advisor based on these suggested criteria, you should make a decision based on who you feel will best serve your needs and personality and not based on the prospective advisor’s gender alone. There is no reason why working with a male advisor should cause you significant concern if he seems to be the best fit. However, do keep in mind that extensive research shows that working with a female advisor can benefit you with solid investment results and a stronger client-advisor relationship. On the numbers side, extensive research has demonstrated that female investors often display better results and more disciplined investing habits, such as not panic selling during a market downturn. Additionally, studies have shown that women tend to be more emotionally intelligent than men, which can translate into an advisor with stronger soft (yet vital) skills such as better communication, listening, empathy, discipline, and resiliency.
Above all else, you want to make sure that your new advisor understands your situation and goals. Finding the right fit has less to do with being a male or female, and more to do with how you feel about the person managing your financial future. Knowing the right questions to ask can help you efficiently whittle your pool of potential advisors down to a few strong candidates. Use well-researched information and your gut instincts to find the one who checks the most boxes for you.