Many years ago, my grandmother was the target of a swindler in the form of a financial advisor. He was smooth, he seemed to know what he was talking about, and – to my Grandma, anyway – he was trustworthy. Grandma chose him as her financial advisor, and he “advised” her right out of her life savings. Witnessing how his shady practices affected Grandma’s later years greatly impacted me and put me on the path towards a career in financial services.
Recent headlines have served as a reminder that shady practices still exist in the financial world. Locally, a well-known financial advisor has been accused of putting clients’ funds in unregistered investments, possibly violating securities law. His alleged acts, if true, affected many Charlotte families, who lost substantial amounts of wealth because they put their trust in the wrong person.
Events like these don’t just affect the invested individuals who lost money. Instead, these events influence every investor who seeks out financial guidance, every individual who chooses an advisor to help them protect and grow their hard-earned assets. Stories such as this make people leery of working with a financial advisor because they no longer know who to trust.
This most recent alleged breach of faith has bolstered my long-held belief that the financial industry needs to embrace transformation. Now, more than ever, investors are demanding honesty from not only individual advisors but also larger financial institutions. There is no longer space within the industry for financial professionals who are motivated only by their own financial gains.
As an independent financial advisor, it is not only my responsibility to keep my clients’ needs and wants at the forefront of our planning. It is also my obligation to ask other professionals within the industry to demand more of ourselves, because investors deserve more from us. We must call out questionable practices when we see them and always hold ourselves to a higher standard of doing what’s best for the client. It is one thing to call yourself a fiduciary; it is something completely different to act like one. As an industry, we also have a duty to take the steps to ensure investors are empowered to make the right choices for their financial futures. One way to do this is through constant communication with clients as well as education programs for clients and general public alike.
One of the keys to a confident future and retirement is working with an advisor that puts the client’s goals first. How, with the many options out there, can you help to ensure you are working with an advisor worthy of your trust? Here are some items to look for:
- Your advisor is honest when discussing how they are paid. Historically, the financial industry hasn’t been forthcoming regarding compensation. Clients are hesitant to ask how their advisors make money. A trustworthy advisor will have an honest, open conversation with you about this.
- Your advisor encourages questions. Any good relationship is built on open, two-way communication. It’s your money; you deserve to know exactly how it’s being invested and why. Your advisor should not only answer questions as you have them, but proactively provide information to you about your accounts.
- Your advisor knows you. All of us are different, with unique goals and dreams for our futures. The right financial plan for you isn’t the right plan for anyone else. Your advisor should offer personalized financial planning that fits your life, not cookie cutter advice for every client.
At Hobart Financial Group, we’ve made it our mission to advocate for better industry practices. We believe that most of the advisors in this industry are trustworthy and principled, and it’s time for both investors and advisors to rally against shady practices. We are committed to ensuring that no one in the financial services industry be allowed to take advantage of hard-working people, especially those in the Charlotte community.