4 Traits Money-Smart People Prioritize in Financial Advisors

Financial literacy is a game-changer as it enables people to live their best lives today and secure the future. It gives better control over money, enables one to make informed decisions, and prevents costly blunders in the long run. However, only 57% of American adults are financially literate, just a little higher than the global average of 56%.

There’s another disconcerting fact about not knowing money well enough. Surveys show that the lack of financial literacy costs 15% of Americans at least $10,000 in 2022. These numbers underscore the significance of expert advice in making money decisions. Fortunately, nearly 330,300  financial advisors are employed in the country, according to the recent U.S. Bureau of Labor Statistics data.

While being spoiled for choice is great, you cannot trust just anyone’s advice when it comes to money. You should look for a reliable and seasoned advisor to help you steer your finances in the right direction. Think beyond reviews and recommendations when looking for a professional you can depend on.

Here are a few must-save traits that money-smart people look for in a financial advisor.

Knowledge and Expertise

Given the complexities of money management, the first thing to look for in an advisor is knowledge and expertise. A deep dive into their website can give you a fair idea. Further, you can learn better by engaging in an initial conversation with the professional and asking a few questions like:

  • What are the best financial products a person should have in their portfolio?
  • How can one compare different investment strategies and choose the right one?
  • How can the evolving tax laws affect personal finances?
  • What are the market trends, and how do they impact money decisions?

Remember to check the basics, such as qualifications, certifications, skills, and testimonials, to ensure that the professional is good enough. 

A Data-Driven Approach

Did you know that a data-driven approach can drive winning personal finance decisions? It can help people make informed choices, optimize their financial strategies, and get on the track to personal financial success. Working with a financial advisor who follows a data-driven approach can give you a winning advantage.

Look for a tech-savvy professional who uses advisor financial planning software to dig deep into client profiles to understand their goals, needs, and pain points. By visualizing data in action, they can offer sound advice regarding wealth management, estate planning, and retirement planning. The best part is that data eliminates guesswork from money decisions and relies on hard facts and statistics.

Asset-Map notes that financial planning tools are not just valuable for financial advisors. They also help clients by offering the clarity they need to assess their progress. A simple, user-friendly map enables novice clients to understand things and make better choices aligning with their long-term money goals. 

Trust and Transparency

Money-smart individuals look for professionals they can trust for the best advice. Honesty, transparency, and integrity are the traits that make them trustworthy. The first thing you should check is whether the professional is a fiduciary advisor. These are the providers legally and ethically bound to act in their client’s best interests. They prioritize client welfare over profits.

As a client, you should also ensure that the advisor discloses all fees from the outset because no one wants unpleasant surprises in the form of hidden fees. Remember to check how they handle potential conflicts of interest. After all, you want to work with someone who has your best interests in mind while managing your investments.

Excellent Communication Skills

Marketing studies correlate communication effectiveness with client satisfaction, loyalty, and trust in professional services. Good communication is even more critical in the financial advisory segment because clients trust professionals with their hard-earned money. Effective communication is the foundation of a successful advisor-client relationship.

When you hire an advisor, ensure they can explain complex financial jargon in simple terms because most people struggle with these concepts. Listening actively to your concerns is another factor that sets a professional apart. They should also be proactive about regularly updating clients about their investments’ performance and changes in market trends that could affect their financial plans.

The Bottom Line

Money-smart clients are vigilant about their decisions, including choosing a financial advisor they can rely on. It takes more than seeking recommendations and reading reviews of their existing client. 

You should be ready to go the extra mile to assess their expertise and ensure they use data-driven tools to provide the best advice. Trust, transparency, and good communication skills add up to make the perfect equation for a winning financial strategy.