Is Your Financial Advisor Worth the Bucks?

The last time I went to Sportsman’s Warehouse got me thinking about the role of the advisor, “middle-man,” broker, or intermediary in the purchase of a product, in this case, a pair of takkies for my daughter. It got me thinking about the extent to which they really added value to my life and how much that cost me … if I’m effectively paying the fees, am I getting good value for the service, or would I rather just buy the product without their help? 

Thinking about it for a moment, I realize that there are stacks of intermediaries between me and a product that I’m after, ranging from the waiter at a restaurant, to the sales guy at Sportsman’s Warehouse, even my Financial Advisor. Where I am explicitly responsible for their fees, I find it easier to set my boundaries in terms of reasonable value received. In cases where their fees are less explicit, I don’t always set adequate expectations in terms of value received and probably find myself metaphorically “out of pocket.” 

The waiter at a restaurant for example … I feel quite discerning in my ability to quantify the value received and figure out a commensurate reward. If I feel like he/she was simply pitching the most expensive stuff on the menu, points get subtracted from the value equation. Where a waiter has spent time understanding the people at the table, the mood, and expectations and consulted appropriately, points rack up. It’s a bad sign if he’s selling the lobster thermidor when we’re only in for a “quick bite.” I usually get to a place where I feel quite validated in terms of the fee that I pay for the value received. 

In the Sportsman’s Warehouse example, on the other hand … the fee for the “sales guy” is wrapped up into the total price paid for the shoes. I get incensed thinking about the number of occasions where I have “paid” for their services even though the job of having “sourced and fitted” the shoes was done, completely by my own efforts. “Incensed,” because of the vacuum of  discretion, thanks to the one-size-fits-all, all-in fee, where I have no choice, but to pay. This sense of “incensed” has only emerged since I’ve become aware that I actually do have an expectation for value – at a minimum, helping me find an appropriate size among the store’s merchandising chaos.

Financial Advice feels similar. I think there is a risk that we don’t sufficiently interrogate the expectations we have of our advisors. As a result we don’t hold them sufficiently accountable and let them get away with the bare basics, representative of a door-to-door salesman. It’s not enough to expect them to be nice. Or friendly. Or just have access to financial products. Or do Financial calculations and complete forms. Or send you monthly newsletters. 

Is there a fee at all, you might be wondering?  Yes. You paying it, either directly or via the product provider. If you, like me, are discerning about how much you pay your waiter and in return for what, isn’t it time to get discerning about how and why you pay your advisor as well? 

Here’s what I expect from my advisor, maybe you could too: 

  • Listen to me. Listen and reflect back to me what you hear, so that I can hear myself through your eyes.
  • Help me figure my shit out. I may think it’s together, but it’s not.
  • I’m not interested in your product. I’m interested in my life. 
  • Help me take the next step forward. Don’t overwhelm me with gobbledy-gook, I just need direction.
  • Help me manage the big things. Give me perspective. Give me a dash-board.
  • Connect my life to my money. Paint pictures that make it clear.
  • Take all of me into account. My life is more than just me. I’ve got kids, a wife, a tenant, a mother-in-law, a business partner, a dog. They’re all part of the story.
  • Elevate me. Make me a better version of myself for tomorrow.
  • Don’t try to be fancy. And speak to me in language that I can understand. 

Not an insignificant list. But in return, I’m willing to pay, not an insignificant fee.

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