In my last post I wrote about how to spot an investment amateur or charlatan – our industry has too many of both. But there are many genuine professionals out there with the wisdom and experience to help you protect and grow your family’s wealth. To find one, look for an advisor that relies heavily on rules and tools. By rules I mean principles and guidelines that they’ve honed over the years, and by tools, I mean vetted financial solutions, products, analytics, and processes that drastically increase the probability of success – yours and theirs.
As a first rule, the true professional is what Ray Dalio calls radically open-minded. They are not dogmatic or dismissive of new ideas or your input. An expert advisor will methodically progress through a litany of questions, genuinely seeking to understand before offering solutions. The common themes of financial planning are second nature to them, but they seek to unearth the nuances of your specific situation because they know it matters. They display humility but exude confidence in their ability to find and weigh alternative solutions. When you see these traits, you are on the right track.
Next, look for a clearly outlined process with purposeful steps that include planning and executing and maintaining progress over the years. It should be efficient and simplified with technology, but thorough. The professional will take time to understand your entire balance sheet, your current cash flow, and required future cash flow – and keep this updated as a matter of course. As you go through their process you will see tools like checklists and flow charts to avoid missing important details. The payoff for taking a disciplined approach is that the expert will cut through an avalanche of financial propaganda and chaos to help you finally identify crystal clear objectives. There will be actionable recommendations and an impeccably tailored solution designed for your family and your current circumstances.
I always look for these traits when I am evaluating the professionals we partner with to serve our clients. Experience and education are good indicators of knowledge, but that is not enough. Plenty of smart people get enamored with their own credentials and start to cut corners or fall behind in their field. I like to see experts rely on rules and tools – which helps make no fools.