Zoe Financial

Having a bad financial advisor means working with someone who doesn’t have your best interest in mind. This may cause you to lose focus on what’s important to you and even find it more challenging to fulfill your financial goals.

If an advisor speaks in a way that makes you think they have financial superpowers, stop and take a step back. You didn’t find “the one.” Although they may sound overly confident and smart, they may also be promising things that no advisor can guarantee.

Here are the most common red flags you should be on the lookout for when interviewing advisors:

1. They’re Constantly Talking About Short-Term Returns

A financial advisor should not promise you returns of any kind. Most people searching for a financial advisor are focused on long-term planning toward goals such as retirement, future home purchasing, college education, or estate planning. If you’re sensing a get-rich-quick vibe from one of the advisors you’re interviewing, run for the hills!

Focusing on short-term investment performance could mean that they don’t have what it takes (or even understand what it means) to be a long-term investor. If you’re going to trust someone to give you sound financial advice for your specific needs, you will want to work with someone who truly understands how to work towards your goals, however long it might take.

1. They’re Constantly Talking About Short-Term Returns

A financial advisor should not promise you returns of any kind. Most people searching for a financial advisor are focused on long-term planning toward goals such as retirement, future home purchasing, college education, or estate planning. If you’re sensing a get-rich-quick vibe from one of the advisors you’re interviewing, run for the hills!

Focusing on short-term investment performance could mean that they don’t have what it takes (or even understand what it means) to be a long-term investor. If you’re going to trust someone to give you sound financial advice for your specific needs, you will want to work with someone who truly understands how to work towards your goals, however long it might take.

2. They’re Pushing Annuities or Variable Insurance Products

Pushing you towards any financial product or investment right off the bat is a red flag, and annuities are often an early sign of this. Often, advisors will try to show value early on in the conversation. If they do it by recommending products, ask yourself: How can someone who’s spoken to me for 20 minutes know what’s “right” for me?

If they circle back to variable life insurance repeatedly, despite your inclination not to buy it, this could also be a sign that the advisor receives a commission from the sale of that product and is not acting in a fiduciary capacity.

If you sense the advisor is being pushy about a specific product, ask them point-blank if they receive any compensation from you buying that product. If they do, you can assume the advisor’s incentives are not aligned with yours. Most likely, their end goal is not to recommend the best products for you but the ones that pay them the most. Again, run for the hills!

3. They Try to Convince You They Can Beat The Market

The magic of the stock market is that it’s impossible to predict. If anyone had the power to beat the market, it would completely lose its purpose. For the past 140 years, the average stock market return has been 9.9%, according to Berkshire Hathaway. Outperforming this number may sound very appealing, but it’s also unrealistic. If the advisor tries to convince you they can do it, they’re probably lying.

Ultimately, you shouldn’t expect your advisor to outperform the market. Your goal should be to receive expert advice and support alongside a solid financial plan that will work for you in the long run.

4. They BRAG

It’s normal for advisors to talk about themselves during initial conversations. Think about it this way, if you’re interviewing for a job, you have a very small window of time to prove how much value you can provide in that specific role. But if you spend the entire time bragging about yourself and telling them how much they need you, they’ll probably choose a different (and less egocentric) candidate.

The same situation applies here; if an advisor is trying to convince you that you need them because they have X number of clients and have managed Y amount of assets, definitely re-evaluate. The conversation should always be around how that specific advisor will help YOU fulfill your personal financial goals.

5. They’re Unresponsive or Take Too Long to Reply

The financial advisor world is entirely client-centric. You are the priority; you are the center of their universe. A typical red flag is if an advisor sounds client-centric and dedicated to you on the call… but then forgets about you afterward.

You can spot this behavior in more than one way. For example, if they say, “We have a financial planning guide that I think you’ll find very valuable,” they should send you the guide as soon as you finish the call or within the next few hours.

It is a red flag if they take too long to reply, whether it is a simple email, a call-back, or a question about their structure. This means the advisor works around their own time and won’t budge if you ever have an urgent or time-sensitive request.

Always remember: If they don’t follow through during your initial calls, they will not once you’re a client.

6. They Have Disclosures on Their Record

One common thing we’ve found in vetting thousands of advisors over the years is that there are advisors who sound impressive on paper and over the phone, but when you check, one of two things happen:

They have a record of being involved in unethical or disciplinary behavior (often referred to as a disclosure).
They have lied about themselves.

A great tool to ensure your advisor checks all the boxes is BrokerCheck. Not only can you tell if they have any disciplinary marks on their record, but you can also confirm if the advisor has been honest with you regarding their certifications, years of experience, and examinations. If you see any marks, steer clear.

6. They Have Disclosures on Their Record

One common thing we’ve found in vetting thousands of advisors over the years is that there are advisors who sound impressive on paper and over the phone, but when you check, one of two things happen:

They have a record of being involved in unethical or disciplinary behavior (often referred to as a disclosure).
They have lied about themselves.

A great tool to ensure your advisor checks all the boxes is BrokerCheck. Not only can you tell if they have any disciplinary marks on their record, but you can also confirm if the advisor has been honest with you regarding their certifications, years of experience, and examinations. If you see any marks, steer clear.

Advisor Red Flags In Summary

Hiring a financial advisor should be about hiring someone right for you, not just someone who seems right. This means someone who understands your goals, values, problems, and aspirations. If your advisor is sitting on your side of the table, you can be confident that everything they do is for your benefit, not theirs.

If you’re in the process of finding your ideal advisor, make sure you’re on the lookout for the most critical advisor red flags to spot before you make any decisions. The things that may seem positive in your initial meetings (like an advisor who knows how to beat the market) can be the exact opposite throughout your financial journey.

We’d love to speak with you about your experience interviewing advisors and be a resource to help you match with a great advisor!

Disclosure: This page is not investment advice and should not be relied on for such advice or as a substitute for consultation with professional accounting, tax, legal or financial advisors. The observations of industry trends should not be read as recommendations for stocks or sectors.

If you’re in the process of finding your ideal advisor, make sure you’re on the lookout for the most important advisor red flags to spot before you make any decisions.

If you’re in the process of finding your ideal advisor, make sure you’re on the lookout for the most important advisor red flags to spot before you make any decisions.

1. They’re Constantly Talking About Short-Term Returns

1. They’re Constantly Talking About Short-Term Returns

6. They Have Disclosures on Their Record

One common thing we’ve found in vetting thousands of advisors over the years is that there are advisors who sound impressive on paper and over the phone, but when you check, one of two things happen:

They have a record of being involved in unethical or disciplinary behavior (often referred to as a disclosure).

They have lied about themselves.

6. They Have Disclosures on Their Record

One common thing we’ve found in vetting thousands of advisors over the years is that there are advisors who sound impressive on paper and over the phone, but when you check, one of two things happen:

They have a record of being involved in unethical or disciplinary behavior (often referred to as a disclosure).

They have lied about themselves.

Disclosure: This page is not investment advice and should not be relied on for such advice or as a substitute for consultation with professional accounting, tax, legal or financial advisors. The observations of industry trends should not be read as recommendations for stocks or sectors.

Disclosure: This page is not investment advice and should not be relied on for such advice or as a substitute for consultation with professional accounting, tax, legal or financial advisors. The observations of industry trends should not be read as recommendations for stocks or sectors.

Ready to Grow Your Wealth?

Ready to Grow Your Wealth?

Ready to Grow Your Wealth?

If you’re in the process of finding your ideal advisor, make sure you’re on the lookout for the most important advisor red flags to spot before you make any decisions.

If you’re in the process of finding your ideal advisor, make sure you’re on the lookout for the most important advisor red flags to spot before you make any decisions.

1. They’re Constantly Talking About Short-Term Returns

1. They’re Constantly Talking About Short-Term Returns

6. They Have Disclosures on Their RecordOne common thing we’ve found in vetting thousands of advisors over the years is that there are advisors who sound impressive on paper and over the phone, but when you check, one of two things happen:

They have a record of being involved in unethical or disciplinary behavior (often referred to as a disclosure).

They have lied about themselves.

6. They Have Disclosures on Their RecordOne common thing we’ve found in vetting thousands of advisors over the years is that there are advisors who sound impressive on paper and over the phone, but when you check, one of two things happen:

They have a record of being involved in unethical or disciplinary behavior (often referred to as a disclosure).

They have lied about themselves.

Disclosure: This page is not investment advice and should not be relied on for such advice or as a substitute for consultation with professional accounting, tax, legal or financial advisors. The observations of industry trends should not be read as recommendations for stocks or sectors.

Disclosure: This page is not investment advice and should not be relied on for such advice or as a substitute for consultation with professional accounting, tax, legal or financial advisors. The observations of industry trends should not be read as recommendations for stocks or sectors.

Ready to Grow Your Wealth?

Ready to Grow Your Wealth?

Ready to Grow Your Wealth?

6. They Have Disclosures on Their Record

One common thing we’ve found in vetting thousands of advisors over the years is that there are advisors who sound impressive on paper and over the phone, but when you check, one of two things happen:

6. They Have Disclosures on Their Record

One common thing we’ve found in vetting thousands of advisors over the years is that there are advisors who sound impressive on paper and over the phone, but when you check, one of two things happen: