Choosing a Financial Advisor

In a bull market, most investors love their advisors. For the most part, investments are going up, and all is hunky-dory with the world. Investment performance is taken for granted and takes a back seat to intangibles—things like “personality” or “service.”

But when a bear market rolls in like a blast of winter air, opinions may change sharply. All of a sudden, performance means everything.

Successfully selecting an advisor isn’t an exact science. It’s about finding somebody with the demeanor, responsiveness, and results to match your own personality and investment needs. Only you know the right mix.

But it isn’t always as easy as it sounds to find the right person. While there’s no precise formula, there are issues to consider when choosing a new advisor or deciding whether or not to stick with a current advisor:


The first issue is whether you trust your financial advisor. If you don’t, the decision’s easy – get a new one. Without trust, nothing else matters.

If you don’t trust your financial advisor, you can’t be sure you’re getting objective advice. Do you believe what your advisor tells you? Or do you feel that crucial information is being withheld and potential investment recommendations overstated, or that you’re being deceived? If so, move on.

Does your advisor seem to have your best interests at heart? Of course, advisors can’t afford to ignore their own interests, but you should feel secure that you’re working with someone genuinely dedicated to your success.

Here’s another test: has your advisor ever tried to talk you out of a trade instead of taking the easy commission?

How your financial advisor handles bad news is important, too. For example, when an investment loses money, does your advisor call you about it? You need a guide who will give you an honest assessment of the situation. Most financial advisors make mistakes. Good financial advisors own up to them.


Another necessity for your advisor-client relationship is a good rapport. Otherwise, the relationship is bound to be short. Why deal with someone you don’t like? Do you hesitate to call when you need advice?

If you’re comfortable, confident, and at ease – if you enjoy doing business with your advisor – you’re on the right track. You don’t even have to know exactly what it is you like about your financial advisor, only that you like the person.

Likewise, is your advisor happy to hear from you when you call? Do you feel a sense of camaraderie, a sense that “we’re in this together?” If so, congratulations.


When you ask your advisor for material or information, do you receive it? Are your calls returned?

When you have money to invest, does your advisor call with ideas and suggestions? When there is important news about your investments, do you hear about it from your advisor before you read it in the paper?

Is your advisor there when you call? Does your advisor call you to advise that you should sell? When trades are executed, does your advisor call to tell you the selling price? Does your advisor take personal responsibility for seeing that your questions are answered and your problems solved?

And don’t forget the annual review: does your advisor review your investments with you every year? Do you receive research when it’s appropriate?

All of these areas and more add up to good service – the kind of service you deserve.


Does your advisor listen? Does he or she take the time to determine your needs?

Does your advisor ask good questions? Listen to your needs and respond accordingly? Take the time to find out what your objectives are, and your tolerance for risk?

A good advisor shouldn’t make a recommendation without first determining your objectives. Since most clients aren’t adept at expressing needs, it takes listening and interviewing skills to get the right information. An attentive, conscientious advisor can be a great asset.

Knowledge and Results

Last but certainly not least, you should have an advisor with demonstrated knowledge and familiarity with various types of investments, and a track record of performance.

If your main interest is stocks, you want an advisor who watches the day-to-day movements of the market. But you also want someone who can give you advice on where the market is headed for the long term. Similarly, if you’re interested in bonds, you want an advisor who deals in them regularly and can explain the ins and outs of the bond market.

When you pay a full-service advisor a fee or commission, you expect quality advice. If you find that you’re doing most of the research yourself, and your advisor is having a difficult time answering your questions about a specific area of investing, perhaps you should look elsewhere.

When following an advisor’s recommendations, examine how the investments have done overall. How much money has your advisor made for you? Would you have done better with the money in the bank? Hopefully not – or it may be time to get another advisor.

Potentially the most important of all questions measuring an advisor’s performance takes your whole investment strategy into account: Are you achieving your investment objectives? Be fair. If your stated objective is to earn 8 percent in tax-free income, and you have, you should be pleased – even if you might have made more money by assuming greater risk. If the market is down and your stocks are down with it, it’s not necessarily your advisor’s fault. But if your stocks are down consistently, you may need new advice.

All of these considerations, taken together, should help you select a first-class financial advisor. There’s no magic to it – just common sense.  I would like to interview with you to become your Financial Advisor.  Please call 515-490-6831 to set up an appointment at your convenience. 


Scott Etzel, CRPC®

Registered Representative