What Women Want in a Financial Advisor – And How to Find a Good One

Category: Financial and taxes in retirement

December 20, 2014 — Last December we posted an article asking women to tell us what they were looking for in a financial advisor, along with their war stories on how it went when they did find one. Many did, and others also asked us to continue on with a followup that summarized that input. So here goes. The first part of this article provides you with the insights and comments of those who responded to our request. Part 2 provides advice for women at 2 top firms on how to find and get the most value out of your financial advisor.

What you said
We were fortunate to receive a multitude (19) of different comments with a wide range of helpful advice. Although we recommend you read all of these comments in detail, this section summarizes and provided samples of most of them here.

– Found it hard to find a financial advisor. Went to meet prospective advisors but felt that they were just selling and looking for new clients

– Many commentators recommended hiring a Certified Financial Planner because they have extra training, and spend a lot of time understanding goals and personal situations

– One had bad luck with brokers who didn’t give much advice. Was concerned about paying a lot in fees for advice of uncertain value

– Another hired an advisor for an initial appraisal and guidance. She found that useful as a road map and has subsequently managed her own money

– Others recognize that advisors can give good advice on a variety of financially related topics, including Social Security and when and how to take money out

– I have a CPA firm that handles my small business/personal taxes yearly. My main reason for not using a CFP is a lack of trust that they will be looking out for my best interests. I think that is what most people would say holds them back. They are also pretty pricey with no guarantees they will do a good job for me. I have extensively used the online free retirement calculators to give me direction and goals.

– These days, every insurance company puts themselves out there as financial advisors, but most are not – they are sales people. I used a CFP even before losing my husband in 1992 when I was 47. She takes all of my life plans into consideration, including short term and long term goals, LTC insurance, SS, income tax brackets, etc.

– In my opinion, there are too many risks with turning our financial futures completely over to someone else. There is a wealth of information on the internet and in libraries. It’s never advisable to stop reading or rely on one article or one advisor, even a trusted one — after all, it’s our money. We know our risk tolerance, future plans, and goals better than anyone else.

– Beware of financial planners who are mostly trying to sell you something else like long term care insurance, life insurance, or annuities

– A young widow had bad luck with an advisor, losing money. After several mis-steps an associate recommended an advisor who has managed her money for the past 4 years. He has kept his promise of monitoring her portfolio. He has done a great job

– You have got to have a plan that includes goals; without goal setting any plan is worthless.
Ric Edelman is a nationally known analyst and his web site has TONS of good info regarding retirement, investing, financial planners and so forth

– Do they give general advice about estate planning or is that included in the fees? Is it all separate fees… one for a financial plan, one for managing investments only, another for estate planing, etc.? If a financial plan is included how many scenarios are included and how often to they redo it. Are any new ones when your situation changes done free or is there another fee?

– I am using TIAA-Cref. My financial advisor is doing more of what you are looking for, financial information, than investing. Meredith, my advisor, actually comes to my home. She made sense out of all the whole picture for me and gave me a better understanding of mandatory distributions and how to prepare for them

– I have been with my financial planner for about 13 years. He has been a godsend and watched out for me since I became divorced. He is fee based at 1.5%. I can call him anytime or e-mail him and I always get a speedy answer. He re-balances my portfolio every year and discusses how best to prepare for retirement.

Part 2: What the experts say
Advice from a Woman Financial Advisor – Part 1

As part of our research for this article we interviewed Alexandra J. Miele CFP, a Wealth Management Advisor at The Andriole Group, which is part of HighTower Advisors, an industry-leading financial services firm. Alex specializes in helping women clients with their financial planning needs, many of whom find themselves unexpectedly single for a variety of reasons, including the death of a spouse or a divorce.

She and our other expert agree that many women are often intimidated by the financial and retirement process. Although they are often familiar with investments and financial decisions in their daily lives, somehow “financial planning” seems complicated and technical. The connection between the technical side and the big picture isn’t there – as in “How does this recommendation connect to me being taken care of in my old age, how can I pay my bills, etc.” Her approach is to explain how each piece of the finance puzzle fits in with overall goals, as in, “Will this approach allow me to live my life in retirement the way I want to?” It is often a discussion that contains some emotional content rather than just technical or historical details.

In her experience financial advisors working with women will have the best success if they avoid jargon and focus on education. As an example, several of her female clients have said they enjoy working with her because she does not speak in acronyms. Complex financial terms and abbreviations often intimidate women who subsequently feel embarrassed to have to ask what they mean.

Her woman clients expect that she will advocate for them with the other advisors in their lives, such as the clients’ contacts in insurance, legal, and banking. She gets a lot of satisfaction from helping with this interface.

Alex also finds that sometimes women don’t know the questions to be asked. To help with that she makes a point of encouraging questions at every step of the way. Social security is a very common area of concern for women, because optimizing benefits as a spouse, widow, and divorced spouse can be very complicated. She helps them get the right answers by working with her clients to help them ask the right questions.

Different Process
She made an interesting distinction between men and women clients when it comes to the process of arriving at an investment decision. Her female clients tend to like seeing all the possible options (for example what portion of the portfolio should go to generating income, how much to outpace inflation, and what should be left for that all important safe -liquid – money). Women want to see all the details, and then arrive at a decision together with the advisor. Men, on the other hand, tend to want a brief summary of the options and quickly make a decision. The actual conclusion for both sexes is often similar, but the process is longer.

Process to find
Alex has some great tips on how to find a competent and compatible advisor:

Always interview at least a few advisors to see who is a good fit for you. Advisors should be willing to spend some time talking with a potential paying client at no charge.

Are you comfortable with the person? Trust your gut. If the person or their program seems too good to be true, it probably is!

Check out their credentials and history. What certification do they have (there are many, but a CFP is one of the most rigorous)? A CFP is good, but not a guarantee. Designations aren’t everything, so ask for references from current clients or professionals who can weigh in on their competency. Also, you should go to the FINRA website and check for disciplinary actions and customer disputes. Sometimes there might be a few harmless ones, but if you see a pattern, stay away!

Ask if they have clients you could talk with. Although with confidentiality a big issue today that might not always be possible,it is a plus if you can talk with someone about how they relate to the advisor and their overall level of satisfaction.

Is the advisor a solo practitioner, or is there a team approach? In her opinion the latter is better, since it allows for collaboration and avoids narrow thinking. Plus it can add stability in the event of your advisor leaving or retiring.

– What is their performance? This is a tricky area, as no performance, no matter how stellar, is ever guaranteed again. What has happened depended on the portfolio and timing. So it is impossible to project how well they will do in the future. Rather, it is more important to understand the risk level vs. performance. How much risk did the advisor take in getting those returns? So, rather than chasing returns based on the past, rely on your own research and gut to get a feel for their demonstrated competence.

What will the advisor’s proposals look like? At the Andriole Group they put all proposals in writing and explain in writing, along with costs. Seeing it in black and white and having it in hand to evaluate eliminates the mystery and builds confidence.

Advisor 2:
These observations and advice came in from a firm we know and respect. As an office of one of America’s most distinguished financial firms, our contacts there have many women clients. They were kind enough to share this advice for women looking for and managing a relationship with a financial adviser.

More Intimidated but Willing to Learn
Our experience is that although women have a tendency to be more intimidated by finance than men, they are usually better students. So it’s important for them to look for an advisor who understands this and can articulate complex financial topics in an understandable language. The communication style should feel like a partnership; comfortable but not patronizing. Move on if the advisor can’t relate to you.

More Conservative
Many women lean more towards a conservative investing style. Minimizing volatility is important in retirement, of course. But some element of growth in order to protect against inflation and longevity risk is also important. It’s critical women work with an advisor who is sensitive to their capital preservation bias, but can help them feel more comfortable with taking on some investments that will help increase their income to meet ever growing expenses.

Need to focus on Longevity Risks
We all know that longevity is a greater risk for women than men. Longevity, in our opinion, is the greatest risk for retirees, because it’s truly uncontrollable. Volatility, spending, and inflation are also risks, but there are methods to help mitigate them. Ask any prospective advisor about the tools and experience they have in helping women quantify that risk, and how they would help you understand the best practices for preparing for or mitigating it.

Implications of Divorce or Death on Retirement Income
We have many women who become clients after a divorce or unexpected death of a spouse. That loss is usually associated with a loss of income. Ask your advisor how they would be able to help you if that happened to you.

Bottom Line
There is a lot of good advice here both from our Members and our two experts. If you don’t have a financial advisor now, this might be a good time to use it to help you find one that fits your needs. Thanks to everyone for your input.

For further reading
Thanks to Jan Cullinane for suggesting this article in the first place. Her book, “The Single Woman’s Guide to Retirement” is full of useful advice. She also recommends DirectionsforWomen.com , an organization established to address the gap between a woman’s financial capacity and her level of confidence.
(Our original article and comments) What Are you Looking for in a Financial Advisor
How to Find Find a Financial Advisor

Comments? Please share your thoughts and observations about the ideas and suggestions in this article in the Comments section below. What have your experiences been – and what would you do differently?

Posted by Admin on December 20th, 2014

16 Comments »

  1. […] further reference: What Women Want in a Financial Advisor – And How to Find a Good One Wikihow – “How to Hire a Financial Advisor” Get Rich Slowly – “How to […]

    by » Why… and How to Pick the Best Financial Advisor for Retirement - Topretirements — December 21, 2014

  2. […] The reasons behind these questions is that we are working on a joint project with frequent contributor and author Jan Cullinane to find out more about women and their use of financial planners. Jan will be using what we find out (anonymously) in an upcoming talk. We hope our visitors find the Comments to this Blog post useful. As a result of your comments and encouragement we were able to put together an article of tips and considerations on the subject: What Women Want in a Financial Advisor – And How to Find a Good One […]

    by » What Do Women Look for in a Financial Planner? - Topretirements — December 21, 2014

  3. Scenario: Couple in their 30’s start to invest for a more secure future. DH chooses the advisors and companies, based on his contacts and friends. DH dies in his 40’s, leaving his spouse to manage all the family assets. Spouse quickly realizes she doesn’t much care for the advisers he chose to work with. IMO, they were generally patronizing, or just didn’t realize our entire situation. Therefore, I started choosing new investments and advisors with whom I felt comfortable, only later to discover that some of them also took advantage of the situation and my own naivety.
    So……my advice after going through this is: Choose advisors you are BOTH comfortable working with and you can BOTH understand and talk with. They should be able to answer all your questions without making you feel inferior. I think some men don’t want to appear ignorant, therefore they act like they understand what the advisor is recommending, even when they really do not. Sorry guys…..I don’t know how else to explain the reason for some of the decisions. My masculinity isn’t at stake, so I really don’t care what anyone may think of me. Some people just don’t work well together. Seek out those with whom you BOTH can work well, because you may wind up having to work by yourself.

    by Caps — December 22, 2014

  4. Caps – Very good points. I agree with you completely.

    I’m a professional, but look kinda grandmotherly LOL. I find that many investment advisors start out acting like I’m a dumb little woman who should just trust them. I do keep a chunk of money in cash, for personal reasons. I’ve interviewed 2-3 investment advisors over the last two years, and they’ve been very anxious to invest it despite my personal reasons for remaining liquid.

    The financial planners and investments advisors that I’ve met don’t know that my spouse had been an investment advisor, so I got to see the “inside” scoop on how a few of the big investment houses operate — for example, daily calls telling staff which investments to push on their investors that day with tidbits of information about the investment (makes it sound as if the advisor has done his/her own research), bonuses for pushing particular funds, annuities, or referrals to their LTC or insurance arms, and the use of software that does all the thinking. Even when someone says that their service isn’t fee-based, that might not be true. They might not get a fee from your investment, but there could be a bonus at the end of the year tied to investments in particular products, or the company itself may push particular products because it has a fee arrangement with a fund family or investment product that benefits the company or its larger clients. I got to meet my spouse’s peers, and learned that the majority of them had no special training in accounting, tax, financial planning or other financial management skills (other than the company’s own training programs for licensing and sales). I was amazed to learn that the most successful financial planner in my spouse’s office had been a used car salesman before switching careers (“Sales are sales, right?”). Among other questions, now I ask for a resume when someone wants to work with me. There are enough planners out there, that we can be selective. For references, I want to hear from someone who has been with their advisor for a few years…ideally through up and down markets, not just our recent up market when a chimp could make money.

    The best advisor I’ve found is actually my personal banker at my local branch bank. He dutifully referred me to their financial planning group when my assets reached a certain number. That financial planner was a jerk, and a total waste of my time. The bank’s financial planner fell into every bad category (patronizing, heavy reliance on software, lack of good money-management credentials, and pushing categories of products that I knew were fee-laden even though he said that his own service was not fee-based). My personal banker, on the other hand, is a career banker who is willing to spend time to discuss my investments and talk about his personal perspective on them. He isn’t actually providing financial planning, but he provides me with great common sense, helpful ideas, and doesn’t rush me when we meet. I’m not sure how you find someone like this who you can trust to assist with self-management of your monies, except by listening to anyone who seems to know what they’re doing, and figuring out for your self if their ideas are sound or not.

    by Sharon — December 23, 2014

  5. Sharon,
    You have much more of the inside scoop on investment firms, so i won’t add too much. What i do want to add is that your advisor should have an appropriate degree, such as Certified Financial Planner (CFP). There may be others as well. This is no guarantee as a person can get this degree with their sole motivation to ‘make lots of money.’ However, it is a long, arduous road; and many persons with CFP degrees are committed to the personal finances of their clients. There are ethic courses, etc. That said, at the very worst, this person knows a heck of a lot more than an investment ‘salesperson’.

    by ella — December 23, 2014

  6. Sorry, i didn’t mean to say “your” financial advisor in my response to Sharon. I meant to say “a” financial advisor; meaning anyone’s advisor.

    by ella — December 23, 2014

  7. After more than 30 yrs in the financial services business, my only recommendation to friends and family is to seek out a “Registered Investment Advisor” who only operates under “fiduciary rules”. The above conversation simply ignores this very important distinction. An advisor operating as a fiduciary has the legal obligation to act in the clients best interests. Period!
    I recommend you get this in writing and store this document carefully. Most bankers, wirehouse advisors, insurance agents, regardless of credentials do not usually operate under fiduciary rules. Instead, their standard is a much lower obligation of suitability. Let’s say a financial advisor prescribes an asset allocation for your portfolio, if he operates under suitability rules, you will probably have a recommended list of investments that his firm offers, usually expensively active managed mutual funds costing around 1 % not including the firms fees. A fiduciary’s prescribed asset allocation will usually recommend low cost index funds and index ETFs. Why, because the average active equity fund management does not even beat their respective indexes before taxes and fees.
    See this : https://us.spindices.com/documents/spiva/spiva-us-mid-year-2014.pdf?force_download=true
    And this is just one issue that highlights the conflict of interests that permeate the financial services industry. That’s why I recommend a Registered Investment Advisor operating under fiduciary rules.

    by Courtney — December 26, 2014

  8. Great advice Caps and Sharon!

    I have been with my advisor for 5-6 years. My town is small so the choices are slim. That is both a good and bad thing. A bad advisor in a small town won’t last but the really outstanding one may choose to live in a larger market. I interviewed a few advisors and decided on the one that:

    1. Explained things in English.
    2. Respected my personal goals even when they did not fit conventional wisdom. I.e. wanted a low interest mortgage paid off before retirement.
    3. Did not give the high sales pitch. I.e. asked me if and how much I want to invest monthly.
    4. Discussed the recommended funds well.

    by AJ — December 26, 2014

  9. I’ve had 3 different financial planners, each invested my money and I never heard from them after. Only staying with these people for a few years each, I learned to analyze the mutual funds myself through Morningstar. Now there is much more information on mutual funds available on the web. Five years ago I tried another financial advisor which I really like. These are the reasons:

    They are a fiduciary, which is very important. A fiduciary duty is the highest standard of care at either equity or law. http://en.wikipedia.org/wiki/Fiduciary

    They have a team approach. Each member is very intelligent in investments.

    Every meeting is held with at least two advisors and they encourage a meeting every 6-12 months. If I don’t call them for an annual meeting. They will call me.

    My questions are answered in depth without bias and without pressure. They will go over the economic climate outlook if I want without rushing me out the door. No mention (unless asked for) or pressure is put on buying any other services.

    All emails are answered in a timely manor.

    The fee is based on the amount of money invested. Without incentives from vendors.

    The money is invested through a large well known brokerage firm, so there isn’t any money going directly through their hands. No Ponzi scheme.

    They move my money around quite a bit, to follow the global economy.

    They stick with a percentage of risk according to my wishes.

    This company is currently on our local radio with their objective views on the global economic and financial outlook without the opinionated preaching and bullying they do on the Fox network. Listening to them is a plus because I can always tune in and hear what they are thinking about in terms of the financial climate. And they have to be knowledgeable on the latest developments because of the radio program.

    Not many advisors have a radio program, but if you can get and advisor with most of the points I describe above, you will be a step ahead of most people.

    by Julie — December 26, 2014

  10. When I retired (early out), I needed to roll my 401k so went with someone I knew at Smith Barney. Wasn’t satisfied so moved to a friend with Wells Fargo but suspected the advice to buy was driven by the boss and I again needed to find someone else. Had met a neighbor who had worked for a national iinsurance organization and didn’t like having to “sell” to clients and really wished to give service to clients. He is fee based (he makes money when I make money) so I moved all to his care and have never looked back. He is in the Sacramento area yet has clients in several different states. A friend of mine in Colorado signed up with him and he visits her there. One time, he was going to Colorado to see her but she had to finish a home project and wasn’t sure she’d have time to meet so he brought his jeans and helped her with her project. Feel very comfortable with Bob and would recommend him to anyone looking for a trust worthy adviser.

    by Katherine — December 26, 2014

  11. Thanks admin for following up…as always great advice from the article and from the comments. I especially found the info about fiduciary rules interesting. I think this is great as one gets older and if your advisor sees you making some questionable decisions! That is also something to think about.

    by Elaine — December 27, 2014

  12. Do most of you feel it is preferable to have a financial advisor in your general location?

    I know that some are national and some are more limited in location. My question is about state taxes. Although I do not expect my financial advisor to act as a CPA, but it is helpful to consider the tax implication of financial decisions. For example, many states consider capital gains as ordinary income.

    by Elaine — December 28, 2014

  13. I found my fee based financial advisor by taking a couple week night class on budgeting for retirement. I pretty much knew what to expect as far as bills and income but I needed to make sure I got it all. I don’t think too highly of the annuities and such so I wanted to hear the pros and the cons. The teacher/advisor spoke in a way for me to understand him. The perk of his class was a financial plan created by him based on my goals, assets, liabilities, etc. After several years of checking in w/him, I retired a little sooner than planned but is has worked out. Also, since I know that cost of living is going up by leaps and bounds in my area, I didn’t want to be financially unable to leave if I waited too long. I am currently in the process of selling my house in Vancouver WA and moving to my dream home in TN. He is fee based and makes money when I make money which makes both of us happy.

    by Maureen — December 28, 2014

  14. Hi Maureen,
    Since we plan to snowbird in TN in about a week from now……. We are curious what town/city you have found and where your financial person resides?
    Thanks

    by Caps — December 28, 2014

  15. Elaine: I think you make a good point. I’ve met CPAs who are also financial advisors, but their fees are much higher because they provide two services. Otherwise, I’ve only met financial planners who have information about the taxability of bonds etc., but who don’t analyze personal tax situations such as whether something will trigger the Alternative Minimum Tax. My spouse’s wealthiest clients had accountants and financial planners work as a team, to strategize together on everything from timing of buys-sells to portfolio balancing. Personally, I just play with my tax software when considering an investment change that could have tax ramifications. It’s not as ideal as paying an accountant, but it has worked for me so far. I tried to get one of my kids to be an accountant, but failed :-).

    by Sharon — December 29, 2014

  16. This is some really great information on finding a financial advisor. I know I’m a little intimidated by the retirement process so planning accordingly is difficult. Finding someone that you can trust will help that process be a little less stressful and complex. Thanks for sharing this.

    by Samantha Dantley — November 9, 2015

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