How to Get the Most from Your Financial Advisor – Part 2 of 2
By Stephen Sutherland, author of Liquid Millionaire.Posted in the Category of Investing, Stock Market, Wealth Building, Financial Advice on 27th November, 2009.
Tags: financial advisor, financial services.
How to Make Sure Your Financial Advisor is Helping Not Hurting
The biggest problem that people have regarding the financial services industry is whether they can trust their financial advisors.
People simple don’t trust financial advisers.
In Part 1 of this series I gave you 4 questions to ask your financial advisor to make sure they are helping you and not hurting.
Today, in the final part of this series, I am going to provide you with a further 6 questions to help ensure you get the best possible service from your advisor.
Question 5
How much time do you spend on watching the stock market on a typical day?
You want them to be answering this question in the same way a professional stock market investor would answer. Ideally they’ll tell you that they watch the market every day and that they watch the market live.
You see, the only way a person can understand how the market works is to put in the hours to really watch it. If you discover that your advisor puts in very little time watching the market, it’s a flag to say that they probably have no idea how the market works. And if this is the case, why would you want to take their advice?
Question 6
How many books have you read about the stock market?
The more books they’ve read, the better. If they have read a lot of books on the market, it probably means that they have a good handle on how it works, especially if the books they have read have been written by successful stock market investors rather than “theory” people.
Question 7
Have you read any books about the stock market written by successful traders? –If yes, how many and which ones?
Some advisers have read books about the stock market but they are unfortunately the wrong ones. When a book has been written by “theory” people and not successful investors it’s probably not going to do you much good. When it comes to information on the stock market, you should always aim to get it from people with results. And if your adviser has not been reading books by traders and investors with a great track record, then once again their knowledge on how the stock market works may be flawed.
Question 8
Will you inform me the day the stock market changes its trend, from being safe to invest (uptrend) to not being safe to invest (downtrend) – and visa versa?
You simply want a straight “yes” to this answer. If they say anything other than yes, it’s a warning sign.
Question 9
Have you informed your clients in the past of these changes in market trend the day it happens?
Once again, you simply want a straight “yes” to this answer. If they say anything other than yes, it could be a potential problem.
Question 10
Do you understand how price and volume action is tied to market direction?
If they say “yes” it means that they are probably knowledgeable in how to read the stock market’s future direction.
Ask them how much after-market analysis they do. In other words whether they assess whether the picture is the same or if something has changed and therefore action needs to be taken.
Watching the market whilst it’s live is not enough. You also want your adviser to be conducting some kind of after-market analysis. This is when they sit down to assess what the market has done in the previous trading session and determine what this means to you as an investor.
You want them to be conducting at least one hour of after market analysis. Two is even better. In the two hour slot, they should be looking at the price and volume action of the stock markets main indexes, leading sectors and leading stocks.
How to Get the Best Possible Advice
For more information on how to get the best possible service from your financial advisor please contact a member of my team for a chat. You have my word there will be no sales, no jargon, just the facts.
Your friend,
Stephen Sutherland
The UK’s Leading Authority in ISA Trend Investing and Author of Liquid Millionaire
Please Note: As always, let me remind you that I am not a financial adviser and therefore not authorised to give advice on what investments to buy or sell.
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