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Is it time to break-up with your financial advisor?

Tips and tools to know if your advisor is the right match for you.

By Lindsay Sparrow 21 January 2020 5 min read

About a year ago, I came across an interesting statistic, which indicated that 80% of women fire their financial advisors within one year of either divorce or their husband’s death. That’s an overwhelming majority - and it made me question the relationship women have (or don’t have) with their financial advisors - how do women know when it’s working, and when it’s time to move on?

 

As a female financial advisor who uniquely caters to women in the investment industry, I had to wonder: within one year of a significant life change, when women should be leaning on their financial advisors for support and critical advice, why are they parting ways?

 

What women think

The best explanation I can provide is that the fundamental connection women need to feel to have a long-term relationship with their advisor is missing. In general, women have a stronger tendency to try to maintain or improve a relationship, rather than calling it quits over a lack of connection.

Over the years, I’ve heard countless stories from women who openly express the lack of connection they have with their advisor. When I ask why they stay, the answer is generally the same: Women feel their husband or partner’s connection with their advisor overrides their need to feel connected at the same level.

In their minds, as long as their partner has a good relationship with their advisor, then that’s “good enough”. However, in the case of a separation or the death of their partner, women are quickly put in the position of taking over 100% of the finances. At this point, women realize they are no longer “fine” with the previous arrangement and make it a priority to find an advisor that really gets them. Women want an advisor that personalizes the experience to meet their needs; someone they can open up to over a coffee or latte and share what’s really on their minds.

 

Find the right advisor for you

My advice is to not wait for a major life change to find a financial advisor you can connect with. Life is happening now, studies find that one of the greatest regrets women feel after the loss of their spouse or at a time of divorce is that they were not more involved with their finances. The more engaged you feel in the advisor-client relationship, the more confident and prepared you’ll feel if and when life throws a curveball your way. Further, the more you know about your finances, the better equipped you’ll be to make the big decisions that could ultimately lead to more wealth and prosperity for you and your family.

 

Relationship trouble: Who should take ownership?

I recently had a conversation with a woman who felt her husband had a good relationship with their advisor, but she didn’t. I asked her why. Her response was that she felt that her advisor spoke in language her husband understood and focused the majority of time on what was important to him. Charts and graphs were a staple of their annual review meetings. What she really wanted was a plan and confirmation that she and her husband were on track to meet their financial goals.

I pointed out that I sensed there was no true connection between her and her advisor. Light bulb! She whole-heartely agreed, the connection had always been surface-level. I asked: Did your advisor ever try to build a connection with you? She responded by saying no, but then proceeded to take ownership of the poor connection that exists between her and her advisor.

Ladies, please don't own this one! Your financial advisor should be a master at connecting with their clients. While we all have to participate to have a strong relationship with our advisors, one of the most critical aspects of an advisor’s job is to ensure clients feel supported and heard.

 

What do women really want?

While only 20% of financial advisors are women, studies show that women don’t necessarily care if their advisor is male or female, they just want someone they can trust. An advisor to connect with them, educate them and make them feel included. Women don’t want to be told what to do with their money, but rather stay informed so they can make the right decisions based on their specific circumstances.

Women aren’t looking for an advisor who only talks about investment performance, while showing them endless charts and graphs. Women want to spend the majority of their meetings with their advisor talking about what is important to them, building a plan financial plan that illustrates how they are going to achieve their financial goals, take care of their family and have peace of mind. Ultimately, women want to be connected with on their level. Connection is the foundation of a great advisory relationship.

 

The ideal advisor checklist

I’ve developed a checklist of what a great financial advisor experience should feel like. If you don’t feel your advisor checks these boxes, then it may be time to have a “heart to heart” and tell them what you need.

 

Your advisor should:

  • listen 80% of the time
  • empower you to ask questions
  • be engaging you in the conversation, especially if your husband is in the room.
  • be someone you feel you could have a coffee or latte with and share what’s really going on
  • educate you, so that you can make the best decisions
  • talk with you, not down to you
  • be open to direct feedback
  • openly and regularly talk about the fees you are paying
  • answer your questions about how they are compensated
  • build a plan that captures all of your priorities.
  • Inspires you to stick with your plan, even when its hard
  • Serves as a behavioral coach during times of market volatility

 

Speak your mind

Men often say that they are not mind readers (I know my husband says this to me weekly). While most financial advisors are savvy and educated, they aren’t mind readers either, which is why it’s important for women to get real with their advisors and tell them what they need.

As a female advisor, I want you to feel empowered to be honest with your advisor. Let them know if you think they’re missing the mark. This will be the first step to finding out if there is a chance to build a fulfilling advisor-client relationship.

Call out what isn’t working and what needs to change.

If they respond with anything other than “I will work hard to be the advisor you need”, then it's time to shop around.

 

ATB Wealth experts are ready to listen.

Whether you're a beginner or an experienced investor, we can help.

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