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How to Get Your Money’s Worth From an Adviser

A good investment pro should have these 17 traits


(This article appeared previously on MarketWatch.com.) Many retirees, perhaps most, have one or more financial advisers. They may include insurance agents, bankers, brokers, financial planners and fee-based investment advisers.
These professionals must all be paid in one form or another. And one way or another, you are the one who pays. Therefore you have a right to ask — and a right to know — whether or not you are getting your money’s worth.(MORE: Finding an Adviser Who’s Right for You)
I’ll focus on how this question applies to investment advisers. But much of it can apply to other types of hired financial help.What Makes a Good Adviser
In my 2012 book, Get Smart or Get Screwed: How to Select the Best and Get the Most From Your Financial Advisor, I devoted a chapter to what investors can and should get from an adviser. This discussion is adapted from that chapter.
I hope that you have or will develop a relationship similar to the one I have with my own adviser. He’s 30 years younger than I am, so he’s likely to be around to take care of my family long after I’m gone. He and I know each other well, and I know I can count on him to take care of my investments so I don’t have to spend any time worrying about them.
Obviously, I have a very high level of confidence in my adviser. I was in the advisory business for many years, and I know that he fully deserves it.But how will you know whether that’s true of your adviser?
17 Traits That Define Excellence 
As you work with your adviser, think about the following points that, in my opinion describe excellence. I think you should be able to take these traits for granted from any adviser you hire.
It goes without saying that your adviser should be competent and ethical and, whenever a conflict might arise, can be counted on to put your interests ahead of his own. For starters, he (or she, but I’ll use “he” for simplicity’s sake) should be truthful and honest with you at all times. He should actively earn your full trust, not just assume that he has it.(MORE: What a Financial Gerontologist Can Do For You)
Here are 17 more key traits:
1. Your adviser should conduct himself in a manner that makes you comfortable opening up to him and telling him everything.
2. Your adviser should be able to win the trust and confidence of your spouse, partner or other family members.
3. Your adviser should treat you, your time and your objectives with respect. He should be willing to answer your questions on any financial topic. He should listen to you and treat your fears, desires and questions seriously. When you are talking or meeting, he should give you his full attention without distractions relating to other clients.
4. When your adviser doesn’t know something, he should be comfortable acknowledging that and willing and able to work with you to get whatever answers and help you need.
5. Your adviser should treat your confidential information as private. He should not divulge confidential information to you about other clients.
6. Your adviser should accept your calls even if you don’t have more money to invest.
7. When your adviser makes a mistake, he should inform you as soon as possible and offer to make things right for you.
8. Naturally, your adviser won’t always be available. Therefore he should make sure you have a competent backup who has full access to your records and who can act on your behalf.
9. Your adviser should be able to help you initiate the potentially awkward discussions that you should have with your children, your parents, your spouse and possibly others concerning your will, your healthcare issues and your finances. In too many cases, these extremely important conversations never happen because people don’t know how to go about it.
10. If you ever experience dwindling mental capacity, your adviser should be able to help protect your assets and your interests from anyone who might try to take advantage of you.
11. Your adviser should always be aware of the tax implications of your investments and help you find tax-efficient says to meet your objectives. This may include decisions about choosing between Roth and traditional retirement accounts and the choice of whether or not to convert a traditional IRA to a Roth IRA.
12. When you retire, your adviser should help you choose the best options for Social Security and any pension that you are lucky enough to have coming to you.
13. Your adviser should be willing to give you general guidance on accounts he isn’t managing, including company stock, options, IRAs, employee retirement accounts and variable annuities.
14. If you have aging parents or adult children who don’t have, or don’t need, their own advisers, your adviser should help you figure out how to give them good guidance.
15. Your adviser should review the beneficiary designations on your IRA and employee retirement accounts to make sure they reflect your wishes.
16. When you need expert help beyond what your adviser can give, he should be able to refer you to competent, reasonably-priced professionals to help with legal matters, estate planning, insurance, banking and more.
17. Finally, if you are ever unhappy with the work your adviser is doing for you, he should be willing to help you find somebody else who will work in your best interests. This may be a painful discussion for you to have. But if you have a truly great adviser, he will want you to be satisfied that you are in the right hands more than he wants to keep your business.
This is a very long list, and it doesn’t include everything I described in my book. However, these are all services that are readily available from many financial advisers. Many of them may be included at no extra cost. If that’s the case, your adviser could wind up being one of the best bargains you will ever find.
Paul Merriman is founder of Merriman Wealth Management, a Seattle-based investment advisory firm, and president of The Merriman Financial Education Foundation. Paul writes a weekly column for MarketWatch‘s The RetireMentors and records a weekly podcast, Sound InvestingHe has authored numerous books on investing including Financial Fitness Forever, Live It Up Without Outliving Your Money and the new How To Invest series available for free at PaulMerriman.com. Follow Paul on Twitter @SavvyInvestorPM.
Richard Buck contributed to this article. 

 

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