Spokane Journal of Business

Five qualities to seek in a financial adviser

Automated investing apps can’t comprehend custom planning goals

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Walmart is getting into the business of financial advice?

I immediately thought, well, they are no longer as prevalent now that Amazon has taken so much of their market share, and they are trying to stay profitable to the market changes.

I have purchased numerous items made in China from Walmart through the years when my kids were growing up. None of those items were worth keeping. Instead, they were consumed or given away.

Walmart is currently in talks with financial services firm Ribbit Capital, backer of the popular trading app Robinhood, to bring financial advice to their customers, and it makes me wonder if it will be helpful, or like many of their other products, have a limited shelf life. We will soon find out.

If Walmart can help people invest who never participated in the stock market, that may be a good start. I have met many people over the years who said they thought wealth management was only for people with a lot of money. The term “a lot of money” is certainly relative, but I believe there should be no barrier to entry for wealth management. If Walmart can do this successfully, I embrace and encourage it.

Who would I recommend Walmart hire to give financial advice to its customers?

It would be the same guiding principles that I believe every investor should seek advice from an adviser. All these qualities are things that a robot can’t possess, but people can. Money doesn’t solve money problems, but good advice can.

Here are five qualities to look for when choosing a financial adviser.

Education: It is crucial. I believe that advisers should not only pass the industry exams that allow them to be financial advisers but also should be college-educated. A college education and other advanced degrees show that an adviser can start and finish an academic program that takes time and effort.

You will need that discipline to help you pursue your financial goals. Ideally, education also helps advisers develop critical thinking skills that they should use to benefit you. The financial industry is changing continually, and it is ideal for your adviser to be a life learner who always strives to keep growing and learning to keep up on all these changes.

Experience: Not all financial advisers succeed. Most smart people can pass the necessary exam, but they must apply that knowledge to be of service to clients and help them over time. An adviser who has been in the industry for over five years has a statistically better chance of making a living as an adviser and staying around for the next 10 or 20 years, according to a recent article in U.S. News & World Report.

Experienced advisers should have junior advisers on their team to provide service in their absence and be part of their succession plan.

Integrity: What is your adviser’s reputation? Have they made many changes in the industry? That can be a red flag. It is a good idea to check out your adviser’s compliance record on www.brokercheck.org. You will be able to see if they have had any regulatory issues in the past.

Chemistry: Do you have a good connection with your adviser? If you don’t, it is probably best to find someone you enjoy connecting with and feel comfortable being honest with the truth about your financial situation. An adviser can’t read your mind, and if you can’t be forthcoming, you won’t get appropriate recommendations.

Communication: You must understand how your adviser plans to communicate and keep you abreast of the market. Your adviser may use newsletters, videos, technology, and social media to get information to you. Is this an effective way for you to consume information? Ensure you understand how often you are to connect to share confidential information and receive customized advice. The more you know upfront, the better your investing experience will be.

Robo investing is here—and most likely here to stay. Businesses like Walmart may attempt to compete in that space, but I don’t think a robot can genuinely understand and care about your goals and needs you have for your life journey. 

There are many talented financial advisers out there. Do a little homework, and you are bound to find a good one to help get you to your personal financial goals.

Sarah Carlson is the owner and founder of Fulcrum Financial Group, of Spokane. She can be reached at 509.747.2075.

Sarah Carlson
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Sarah Carlson is the owner and founder of Fulcrum Financial Group, of Spokane. She can be reached at 509.747.2075.

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