top of page
  • Bob Brooks

Avoid This One Step with a New Financial Adviser

I recently went to an investment conference where you hear other advisers talk about strategies and best practices. One thing struck me as I was listening to various processes from other advisers. Some advisers expect an enormous amount of trust from new clients up-front. What was more interesting is that most advisers did not see any problems with this way of handling new clients.

Here was a common practice that I would advise you against agreeing to.

After getting to know you and talking about your goals and objectives, the adviser is ready for you to sign transfer paperwork to move all of your investments over to them without even knowing or being told what the adviser will be doing to fulfill those goals and objectives.

Their rationale was that it didn't matter because the client was hiring the adviser and not working with them because of investments or products that they would be recommending. It was about complete trust in the adviser and them doing the right thing.  

That is an enormous amount of trust to transfer to an adviser that early on in the process...and possibly a big mistake. 

What if you transfer everything over to an adviser and find out that you don't agree with their methodologies or beliefs?

Keep in mind the following:

First, there is a variety of ways to go about the investment process. Some are much better than others. You need to find agreement with the adviser BEFORE signing on the dotted line.

Second, when it comes to income producing products you really have to make sure you agree with how they work up-front. It is a big commitment that the adviser is just expecting you to make based on trust.

Third, the ability to share with you ahead of time recommendations is a commitment the adviser makes up-front. By extending all of the trust up-front you are the only one that has any personal investment in the relationship.  

What's worst, some advisers are arrogant enough to not even accept a new client without that client agreeing to transfer their investments up-front. To each his own. From the perspective of being a new client, that would be a non-starter for me.

Starting a relationship with an adviser is a big deal and needs to be done with much thought and prayer. Don't rush the process and get as much information up-front before you transfer over the most important part of the  

bottom of page