Working with a financial professional should provide value to you and your financial life. But when you’ve had a negative experience with a financial advisor, it can be challenging to overcome successfully.
Is this you? Have you had a bad experience with a financial advisor in the past? And if so, how has that negative experience impacted how you handle your finances today? Unfortunately, a bad financial experience can leave scars that range from healthy skepticism to an immovable distrust and fear of all financial professionals. Perhaps unsurprisingly, the 2016 Edelman Trust Barometer revealed that financial services ranked last in the 25-country survey of the general population with a 51% trust rating.
You’ll never know how good your financial advisor is until the market takes a tumble. Therefore, given the recent recession we’re now recovering from, it’s possible a few warts were uncovered that potentially left you wanting more from the financial services industry.
Despite what your past experiences have been, here are a few ways to overcome a bad financial advisor encounter and use it toward a more rewarding experience in the future.
Write Down What Went Wrong
It’s valuable to jot down exactly what contributed to your bad experience with a financial professional. Taking stock on what went wrong and in what instances will reveal what’s most important to you when it comes to working with a financial professional.
Maybe your financial advisor didn’t respond to your questions quickly enough or was always impossible to get ahold of when you wanted to talk. Or she wasn’t proactive in calming your financial fears when the market started to take a dive. Worse yet, maybe he didn’t do what he said he was going to do, and it resulted in negative financial consequences for you and your family. Or she tried to put you in an investment you weren’t comfortable with or sell you something you didn’t want or need.
Whatever your experience was, write it down and make a list of your grievances so that you know exactly the type of financial professional to avoid in the future.
Get Clear on What You Want and Need
Not all financial professionals are created equal. There are a wide range of specialties within the financial service industry (often identified by the letter designations that follow their name), so knowing what you want when it comes to a financial professional will help you narrow your search criteria going forward.
If, for instance, you really want help getting organized in your financial life and made aware of more ways to maximize your finances for your retirement, then a CERTIFIED FINANCIAL PLANNER who specializes in comprehensive financial planning is probably a more appropriate match for your needs than a broker-dealer who buys and sells securities. If you own a business and need someone who can better instruct you on tax-efficient moves you can make, then a Certified Public Accountant (CPA) who specializes in business taxes is more appropriate.
What you want and what you need from a financial professional should go hand-in-hand. The way a financial advisor works can be just as important as the actual type of service he or she provides. Referencing your list of what went wrong from above will make it even easier for you to identify what it is you’re looking for in a financial advisor and can empower you stand firm in your financial decisions.
Don’t Stay Where You’re Not Comfortable
This may go without saying, but if you’ve had a bad experience or are having a bad experience, you don’t have to stay. Chances are if you’ve had a bad experience you shared it with your financial advisor and gave them time to make it up to you before making the decision to part ways.
Sometimes the only way to overcome an unpleasant relationship is to move on. A financial advisor or the firm he works for may try to retain your business by introducing another team member to your account or reassigning your account to a different advisor altogether. Either way, go with your gut instinct, and don’t be afraid to terminate a relationship if it’s not serving your needs or meeting your expectations.
Sometimes nothing has to go “wrong” per se, but you may feel like the relationship just isn’t the best personality fit, the service isn’t that great for the fees you pay, or you don’t agree with the investment philosophy. Whatever your reasons for wanting to move on, know that you can move on.
This is sometimes easier when you’ve already selected a new financial advisor. Your new advisor will help you transfer your assets over and help manage the paperwork involved in initiating the necessary transactions. In most cases, you can easily transfer assets when you move on from a financial advisor.
What you learn from a bad experience can be used to embolden smarter financial decisions. As the client, you should always feel comfortable and confident in the financial team you select and the decisions being made to help you reach your financial goals.