How do you identify a good advisor? You can start with referrals. Talk to CPAs, attorneys, and your friends to get a sense of whom they are working with and what they like about those advisors. You can also go to an advisor’s seminar to learn more about him or her, but the best marketers are not necessarily the best advisors. Many of the best advisors do very little marketing; instead, their business has grown organically through referrals.

Sometimes people come in to see us, and their main objective is to hire an advisor who can beat the market every year and make big money for them. Some advisors will put together a portfolio and boast about how it performed over the previous five years. If you look more closely, you very likely will find that the advisor did not have that portfolio five years earlier. The reality is that the advisor has put together a collection of investments that, in hindsight, have done well and is simply suggesting to clients that they should follow suit. It amounts to chasing performance. It doesn’t work that way. Historically, chasing performance results in an underperforming portfolio. And so the client, disappointed by the results, moves on to another advisor.

If you look at the data, historically even the great investors of all kinds have periods of one to three years when they have underperformed, for whatever reason—perhaps their style is out of favor. They have other periods where they outperform the average. Investors ultimately achieve success when they have the patience to work through those periods of underperformance. Those who chase performance and move from investment to investment or advisor to advisor may not be recognizing the real problem: themselves. This is not to say you should never fire an advisor, but just be sure you are moving on for the right reasons.

How can you tell whether you’re getting the service you need? If your meetings with the advisor feel more like a social event or an opportunity for your advisor to pontificate about the markets, you are probably not getting what you need. Real planning takes time. Your advisor needs to ask you for a lot of information, then use it to give you feedback. Has the advisor asked for a copy of your tax return and your 401(k) statements? Have beneficiary elections been reviewed to make sure they are current?

Those are just a few of the considerations that need to be addressed.

This advance preparation is a foundation to build on and adds value to the relationship.
For more information about finding the right financial advisor, you can read my book, The Power of Persistent Planning: A Review of Successful Financial Planning Strategies. For more information, click here.


Any opinions are those of Douglass Gross and not necessarily those of RJFS or Raymond James. Expressions of opinion are as of this date and are subject to change without notice.

Past Performance does not guarantee future results.

Raymond James financial advisors do not render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional.

Keep in mind that there is no assurance that any strategy will ultimately be successful or profitable nor protect against a loss