You Have to 'Date' Your Financial Advisor to Find the Right One — Here Are 3 Tips to Doing Just That. Here's how to use the dating process to connect with the right advisor to help you connect with your money.
By Derek Notman •
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Our money is very personal. We tend to be overly private about it and rarely open up and share our financial skeletons, mistakes, what keeps us up at night, how much we make, how much we have and so on. How many people do you really open up to about your money?
This is the challenge and opportunity. Most of us need help to understand and manage all aspects of our money, but we have one big roadblock that prevents us from getting help: a lack of trust. It's scary to open up and let someone into your financial life, so we tend to not let others in and then suffer the consequences of not getting the professional help we need to get the outcomes we desire.
Connecting with a financial advisor is a lot like dating. Ever been on a first date that went poorly? Most of us have! We can learn a lot from the dating process when it comes to finding the right financial advisor for us. Here are three things you should consider when looking for and hiring a financial advisor so you can become the master of your money and take action to improve your finances.
Related: The Pros and Cons of Hiring a Financial Advisor
Where we find our financial advisor matters
When we are ready to commit to a serious long-term and trusting relationship, be that marriage or with a financial advisor, we tend to look to sources of credibility that instill confidence. I like to compare this to finding your life partner via eHarmony vs. Tinder. Both provide a service that people are looking for but the experience and outcomes are arguably very different.
When looking for a financial advisor we have a similar situation. Finding a financial advisor by getting served up an ad on Facebook and then getting bombarded with cold calls doesn't quite feel right. It doesn't exactly give us the confidence we need to open up about our money. Would you marry an advisor you found this way?
Instead, people should look in places where a community of advisors already exists, like the CFP Board's LetsMakeAPlan service. Like dating, this helps us know we are looking in the right place to find that first date that we actually want to go on. But it creates another problem: How do we pick the right advisor for this first date when we have hundreds to choose from?
How we choose our financial advisor matters
Ever heard of the jelly conundrum? Basically, when we are given more than five or so jelly choices on the shelf at the grocery store, we shut down and don't pick any of them. The same holds true when trying to figure out which advisor to pick. Serving up a list of hundreds of potential advisors is overwhelming, we simply won't pick one at all. Imagine having to pick your first date from 100+ people, forget it!
The importance of advice engagement is becoming more and more important. It is essentially how well an advisor connects with and listens to us which in turn instills trust and confidence so we will take action. Connecting with a financial professional is of the utmost importance since getting help with our money requires us to open up and take action.
If we don't connect with our advisor on a deep level of understanding, then chances are we won't open up about our money, let alone take action on any recommendations they have for us, so the first step is finding and connecting with an advisor we can trust. We know from the paradox of choice that we won't make a choice when we have too many options to pick from so we have to find a place or service that helps us narrow down the choices from hundreds to three or four.
Our brains can handle this. The challenge here is that most "refining" processes only let us refine via things like where we live or the type of credentials an advisor might have. Both are helpful, but we don't connect with other human beings based solely on our ZIP code.
How to connect with a financial advisor matters
I love this quote from former President Theodore Roosevelt: "No one cares how much you know until they know how much you care."
When dating to find and marry your life partner your first and second dates will cover topics like your interests, your background, what you went to school for, what you like to do for fun, etc. We talk about these things since we are wired to connect with other people like us based on a variety of shared commonalities, philosophies, interests, etc. But eventually, we get to the topics of money, employment, faults, quirks, family baggage and so on. In other words, once we know we like each other, we start to dig into the less glamorous yet equally important topics.
The same should happen when we're looking for and trying to connect with a financial advisor. It's important to get to know your advisor on a human level first. Do you like each other? Do you have share commonalities, etc.? Once you feel like you could work with a particular advisor you can then dig into asking more business-related questions.
People should look for ways to connect with their financial advisor like they would with someone they might date. Do you have shared commonalities, experiences, interests and philosophies? Connecting on these levels will set the stage for trust and opening up about your money. Trust is a byproduct of what I refer to as human dimensions. Once we connect on these dimensions, then it becomes very important that the advisor we're considering has the experience and credentials to best help us — hence the above quote from Roosevelt.
Relationships matter. When it comes to finding the best financial advisor, consider these three tips. Getting help with your money is just as important as where and who you're getting the help from.
