Question: Gerry in Mason: I’m just wondering how someone knows it’s time to leave their financial advisor? My dad works with one but I don’t think it’s a good fit for him.
A: We’re sorry to hear this. Like any strong relationship, a client-advisor relationship should be based on trust, understanding, and honesty – but this unfortunately isn’t always the case. And for someone who’s in the relationship (as your father is), it can be hard to see the signs that maybe it’s time to move on. Here are four of those signs.
1. Does your father feel like his advisor listens to him? Like, really listens to him? Hears and addresses your father’s concerns and worries? Answers his questions in a straightforward manner and without condescension? Hopefully this is the case. Because working with an advisor should be a two-way street of give-and-take. An advisor shouldn’t talk at you.
2. When does your father’s advisor reach out to him? If it’s only when the advisor is trying to sell a financial product, that’s unacceptable. An advisor (or their firm) should have an open stream of communication with their clients, even when the market is doing well.
3. As circumstances shift in your father’s life, is his advisor willing to adapt as well? Or has the advisor not updated your father’s retirement plan in years? Because as life changes, so should a plan – and the advice you’re receiving. No one’s life is static. An advisor should always be taking this into account.
4. Does your father know how he’s paying his advisor? And how much? Because some advisors aren’t always transparent about their fees. Some even hide conflicts of interest that could result in high commissions. Have your father request his advisor’s ‘Form ADV.’ This will disclose any of those potential conflicts of interest and, even more importantly, reveal whether or not the advisor has been upfront with him. Any breach of honesty should be a red flag.
Here’s the Allworth Advice: There are, of course, other signs it could be time to switch advisors, such as a straight-up personality clash. Try discussing the above points with your father. Hopefully this third-party perspective can help him better assess his situation.
Q: R.D. from Monfort Heights: I want to protect my credit and information, so should I get a credit freeze or lock?
A: Both will restrict access to your credit reports, so let’s explain the differences. A credit lock is offered by the three major credit bureaus (TransUnion, Experian, and Equifax) and can be added or lifted instantly using an app. But you should consider it more of a ‘product’ that’s typically sold for a monthly or annual fee.
On the other hand, while a credit freeze is also offered by all three bureaus, it is free. It also offers more legal protections than a lock. But one downside is that it can sometimes take a few business days to ‘thaw’ a freeze (and you better not lose your PINs!).
The Allworth Advice is that putting either in place to help prevent identity theft is better than nothing. However, assuming you’re not applying for any new credit in the near future, we generally prefer credit freezes.
Every week, Allworth Financial’s Amy Wagner and Steve Sprovach answer your questions. If you, a friend or someone in your family has a money issue or problem, feel free to send those questions to email@example.com.
Responses are for informational purposes only, and individuals should consider whether any general recommendation in these responses is suitable for their particular circumstances based on investment objectives, financial situation and needs. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional adviser of his/her choosing, including a tax adviser and/or attorney. Retirement planning services offered through Allworth Financial, an SEC Registered Investment Advisor. Securities offered through AW Securities, a Registered Broker/Dealer, member FINRA/SIPC. Call 513-469-7500 or visit allworthfinancial.com