Do you believe that your financial advisor truly communicates with you? Ask yourself the following questions about your relationship with your advisor. If any of these situations sound familiar, you may have a communication issue that needs to be addressed.
- When you are discussing a financial strategy that you are following with friends, do you mention you are doing it because your financial advisor told you to?
- Does your advisor use business terms that are confusing and that you don’t fully grasp?
- Are you afraid to ask questions about specific financial strategies they suggest?
Having effective communication is an easy concept, but it can be hard to implement. We all process information differently and therefore have various ways of understanding the financial strategies that are suggested to us. Some people prefer to see the idea presented with extensive backup research and detailed information. Others just want to know what the end numbers will be and are not worried about the specifics of the plan. Once you determine which type of client you are, you must also determine what format is best for you to receive the information. Some people would rather see the material visually, in graphs or charts, while others do better with the particulars written out in words.
Once you discuss these preferences for the type of communication that is best for you with your advisor, ask questions about the material presented, even if you feel you are supposed to already know the answer. On one occasion, my own investment advisor brought up a business term with which I was unfamiliar, multiple times. As a Certified Financial Planner with a master’s degree in financial services, I was embarrassed to ask the definition of the word he was using. However, as I was a client in this specific situation, I had a right to ask and doing so would only help me in the long run. After I inquired, my investment advisor quickly explained what he meant and I felt much better for asking — I then understood his lingo so we were on the same page with his idea.
As an advisor myself, I sometimes find that my experience with a topic is different than that of my client. I encourage them to keep asking questions if my explanation is not clear to them. Start the communication conversation with your advisor. Explain how you make decisions and need items presented. Make choices. Most advisors will be happy to work on their communication with you — they want you to understand their ideas so that you both can work toward achieving your goals.
If your advisor does not take the time to communicate effectively with you even when you try to start the conversation, then perhaps they are not the best advisor for you. There is nothing wrong with switching to a different advisor who can better communicate in the way you need. Financial advisors are there to help you implement tools in your life to support you living your life to the fullest. They can only go about this if you stand up for your own vision and values.
Joan Sharp is a member of the DailyWorth Connect program. Read more about the program here.