The elements that are important for a financial adviser relationship are also essential to any relationship where one party provides a service to another, such as with your doctor, attorney, hairdresser, mechanic, or contractor. Here are some fictitious situations to illustrate why all three elements must be present to form and maintain a healthy, long-term relationship:

#1 – Likability. Let’s say you have been referred to a financial professional by a trusted friend. The adviser has great credentials so you’re confident he knows what he’s doing. Unfortunately, when you meet him, you don’t like his personality or the way he conducts business. The relationship is probably not going to work. Expertise and trust are critical, but dealing with someone you really don’t like can be awkward and unpleasant.

#2 – Trustworthiness. You attend a financial dinner-seminar held at a local restaurant. The presenter is an engaging speaker. She is personable, likable and seems to know what she is talking about. Afterwards, there’s pressure to make an appointment for a sales presentation at your home. After the meal you feel obligated and agree to meet. Later, you are disturbed by an Internet search on the presenter that brings up nothing – no website, no credentials, no office. The relationship is probably not going to work. Who in their right mind is going to turn over their finances to someone they don’t trust?

#3 – Knowledge. A friend’s son is a financial adviser and he wants to do business with you. He is a very likable guy and you’ve known him since he was a kid. You trust him to prepare an investment proposal for your retirement funds. Unfortunately, his presentation is not impressive. When asked about his qualifications, you find out he has the proper licenses, but has made no effort to get any financial credentials. You simply don’t have confidence in his ability. The relationship is probably not going to work. “Everybody’s gotta start somewhere,” is how the expression goes . . . but don’t let someone “practice” with your life savings!

Get All Three: In 2005, I needed cervical surgery on my neck. After interviewing several doctors, I chose Dr. Bill Kuhn because, 1. I like him – he is friendly and straightforward; 2. I trust him – he takes the time to explain everything; and 3. He is knowledgeable and experienced – he is a Board Certified Neurosurgeon. I consider both the surgery and the relationship to be great successes. How do you replicate this kind of relationship with a financial adviser? Search for experience and credentials. Interview the adviser, and don’t settle for anything less than all three of these important elements!

 

 

 

 

 

 

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David D. Holland, a CERTIFIED FINANCIAL PLANNER™ practitioner, hosts a weekday radio show at 9AM on AM1380 Ormond Beach, AM1230 New Smyrna Beach and AM1490 Deland. He has also authored two books in his Confessions of a Financial Planner series. Holland offers investment advice through Holland Advisory Services, Inc., a registered investment adviser in Ormond Beach. He can be contacted at (386) 671-7526. Email your financial questions to info@DavidHolland.com.