What to Look For in an Advisor

02/20/2012 5:30 am EST


Anthony Williams, who educates financial advisors, explains the top qualities that an investor should look for when meeting a potential financial planner.

Anthony, you educate investment advisors who are working toward a professional designation. What exactly are you finding are the main qualities that an advisor needs these days?

The obvious thing to start off with is technical knowledge. Clearly, this is a very technical industry—you’re dealing with people’s finances, and you’re dealing with people’s livelihoods. It’s a position of trust…so there are a number of components.

But certainly a sound technical base, which really can be achieved, from the public’s point of view, to determine what an advisor has achieved. That is, really, what designations, what professional financial designations do they hold?

Now you know as important as that may be, it’s also important to keep in mind that that, in and of itself, is really not enough. There are multiple—it’s a relationship, and based on being a relationship, it’s not just hardcore facts and figures that you got to throw at the client. And strategies, clearly there’s a connection.

There’s an emotional involvement. There’s got to be this long-lasting…you’ve got to create a feeling of comfort, and you’ve got to be able to lower the guard down for the client and make them feel comfortable enough to invest with you and deal with you and accept what you’re saying.

So it’s really very much like a doctor with a good bedside manner. We’ve all run into a situation where we maybe been in front of a doctor who may be brilliant to be in that position, but may not have the best people skills. Clearly, if they’re going to be performing some sort of surgery on you, you want to be able to translate that information to the patient in a way that makes the patient feel comfortable and to trust the doctor.

It’s really no different if you tie that analogy back to a relationship with a planner and a client. The client needs to feel comfortable enough to say "Yes, I accept what you’re saying, you sound like you’re professional, you sound like you’re knowledgeable, but you also have that human aspect, that emotional connection, so it means that you can relate to my wishes. You can relate to my fears, you know if I am fearful of certain types of investments."

I mean, there’s no better time to really talk about that than right now. We’re in a very turbulent situation, so there’s got to be a lot of hand-holding. You’ve got to be patient as well.

You know the vast majority of people, they don’t have that technical knowledge that you as a planner would have. You’re going to have to be able to take a very complex strategy, or a tax situation,. or whatever the case may be, and be able to in layman’s terms break that down in an understandable way and a comfortable way for the client.

What should the client look for when he or she is seeking an advisor?

Again, a lot of different qualities, but certainly designations would be one—although it’s not the be-all and end-all. But it’s an indication that the person has met certain standards, certain accepted standards.

The human aspect: can you relate to this person? Just looking at them…are they a good listener? That’s a very key, important component as well. Because at the end of the day, the only way they can make meaningful recommendations to you is if they’ve assimilated all the information that you’ve given them.

So they have to be very effective listeners. And empathy. I think empathy is a very important quality as well in a planner.

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