What to Look for in an Advisor

Falcon Wealth Advisors Co-Founder and Wealth Advisor Cory Bittner, CRPC®, and I have both worked as wealth advisors for over a decade. We of course have had thousands of client meetings during that time and feel we have unique insights into what people should look for in an advisor. In the latest episode of Upticks, we discussed what investors should consider in an advisor.

Jake: Let’s start our conversation by talking about definitions. People are familiar with a number of terms for our profession, including wealth advisor, investment advisor, financial advisor, etc. I’m not sure why these names haven’t been standardized, but I will note we call ourselves Wealth Advisors at Falcon Wealth Advisors. Still, I wouldn’t focus too much on the title as you seek out an advisor.

If you’re seeking a wealth advisor, there are many questions you will want to ask them, including the four below. We will discuss each of these questions and more today.

• Are you a fiduciary?
• What is your service structure and how much do you charge?
• What type of clients do you work with?
• Are you willing to collaborate with other financial professionals?

Cory, what’s the first thing someone should look for in an advisor?

Cory: The first thing you should look for is the advisor working in a fiduciary capacity. A fiduciary is required to put the client’s interests ahead of their own and is legally required to act in their best interests. It’s the most stringent level of advice that a wealth advisor can offer.

Jake: It’s a simple question you can ask advisors that you’re interviewing: “Are you a fiduciary, with all of my assets, all of the time?” It’s worth noting that brokers and insurance agents are held to different standards and aren’t required to act in their clients’ best interests. However, at Falcon Wealth Advisors, as fiduciaries, we act in our clients’ best interests with all their assets all of the time. In my opinion, being a fiduciary is table stakes.

I would also encourage anyone interviewing a financial advisor to visit BrokerCheck to learn more about an advisor’s background and if they have any disclosures—which can include formal customer complaints—on their record. With that said, you shouldn’t necessarily avoid advisors who have disclosures on their record, but it’s something to learn more about. And suffice to say, a pattern of disclosures could be concerning.

Cory: Well said. Don’t you think most investors expect their wealth advisor to be a fiduciary?

Jake: Yes! Working with a wealth advisor shouldn’t be like buying a car. When I go buy a car, I expect that the salesperson’s top goal is to make as much money off me as possible. Few would want to approach their relationship with their wealth advisor in the same manner. The reason you need to ask a wealth advisor is if they’re a fiduciary is because not all advisors are fiduciaries.

The second thing you will want to ask a potential wealth advisor about is their service structure. At Falcon Wealth Advisors, we work hard to standardize our service and customize our advice. For a couple reasons, I don’t think you would want to work with an advisor who doesn’t standardize their service. If an advisor is able to customize their service for each client, that likely means they don’t have that many clients, which is a red flag. And they may be disorganized and opening themselves up to mistakes. When we work with clients, we offer a regimented service model so that we can provide a consistent experience. We aim to be very clear with clients about what we do and do not offer.

Of course, your financial plan is unique to you. That’s why we offer customized advice, which we are able to do because we have a personal relationship with our clients and a financial plan we update in real-time.

Cory: The third question you should ask: “Are your fees clear and transparent?” Most people have a good idea of what they pay for goods and services they purchase. That same standard should hold true for financial services. There are so many complexities associated with our industry and there are a plethora of ways advisors can be compensated.

At Falcon Wealth Advisors, we believe our cost structure should be clear, transparent and understandable. Knowing exactly how much you pay for a service sounds obvious, but it’s not in our industry. That’s why we’re passionate about being straightforward with our clients regarding the fees they pay for our services. Sadly, this is not the way many advisors operate.

Jake: Yes, we post our costs on our website so that it’s clear what it costs to work with us. And because we don’t use financial products, our clients don’t have to pay any fees outside of what they pay for our services—which regular readers know includes investment management, financial planning, tax planning and more. We believe we are charging an appropriate amount for the value we bring to our clients’ lives, so we have no reason not to be transparent about our cost structure.

The third thing you will want to ask about is what type of clients the advisor works with. As our industry has evolved, advisors have developed niches. I like knowing that many of our clients have similar backgrounds and needs, because key learnings we take in from working with one client can help us serve many clients. And I think it provides new clients comfort to know that we have worked with others from their company and understand their 401(k) plan, pension and other variables. I don’t want to discount our ability to work with all types of clients, but our experience serving high net-worth individuals and their families—including those who worked at publicly-traded companies and have company stock—is valuable.

Cory: Retirement planning is an important focus for us. We have a lot of experience helping clients make decisions around Social Security, Medicare, Roth conversions and many other important retirement topics. While situations vary from person to person, our experience in these topics serves us well in all the clients we work with.

Jake: Good point, Cory. You and I are both Chartered Retirement Planning Counselors℠, which means we’ve taken the time to study the complexities associated with retirement.

The next question you should ask a potential advisor is if they’re willing to collaborate with other financial professionals. Can you talk about this?

Cory: At Falcon Wealth Advisors, we work with accountants, estate planning attorneys and other financial professionals who serve our clients. By communicating with them, we can give our clients optimal service. For example, we mentioned tax planning. While we are not tax professionals, we do strategize with clients about how they can pursue tax-smart investment strategies—and we’re all the more effective when we can collaborate with their accountant.

Jake: I think you can think of our team as the quarterback in these situations. Because we are the ones building and updating a financial plan, it makes sense for our team to stay in touch with these financial professionals. We’re not shy about working with other professionals or referring clients to other professionals when they have a need outside of our expertise and skill set.

Many advisors may say they will work with other financial professionals, but what’s unique about Falcon Wealth Advisors is that we have built strong and lasting relationships with other professionals, even though we don’t have any financial incentive to refer our clients to them. We simply refer our clients to them because we believe they will effectively serve clients in a straightforward manner, just as we do. We even know a retirement coach who can help with the psychological element of retirement.

To wrap up our conversation, I want to talk about three things that make Falcon Wealth Advisors unique:

1. Our Ensemble of Professionals

As clients know, Cory and I each have a group of financial planners we work with, and in turn, both of our groups work with particular clients, offering a consistent experience. In addition to our financial planners, we also have two other teams: our operations and investment management groups, which both serve all our clients. When a client chooses to work with Falcon Wealth Advisors, they receive access to our entire 15-person ensemble practice. And members of our team have valuable educational credentials, such as the Certified Public Accountant credential, the CERTIFIED FINANCIAL PLANNER™ credential and more.

1. We DO NOT Invest in Products whenever Possible

Many advisors use financial products like mutual funds, exchange traded funds and annuities. We don’t, for a number of reasons. Instead, we focus on individual stocks and bonds, and trading options for some clients. This approach limits the fees clients have to pay, as nearly all products have fees associated with them, which you have to pay on top of what you’re paying an advisor.

Individual stocks and bonds also offer a level of transparency. It’s easy to see exactly what you own and how it’s performing. And most importantly, it gives us control over how a client’s money is invested.

1. We Stand by our Responsiveness

My clients often joke with me about how I reply to emails on Saturdays and Sundays. But if I have an opportunity to reply to a client, I do it. I know the same goes for you, Cory. And we do this because we care about our clients.

We have a new commitment to clients that we’re rolling out in 2023 – If they email service@falconwealthadvisors.com, they will receive a response within 24 hours. And if you don’t receive a reply within 24 hours, call us out. We would be happy to take you to lunch as an apology. While we can’t necessarily provide a resolution within 24 hours, our clients should and will know their needs are being heard.

Cory: I know we both value responsiveness and that high level of service is what we want to provide clients.

Jake: We so often meet with potential clients who say they don’t hear from their advisor. At Falcon Wealth Advisors, we strive to make sure we build relationships with our clients, and one key way to do that is through responsiveness.

Thanks so much for joining me, Cory. In summary, here are the four questions anyone meeting with a potential wealth advisor should ask:

• Are you a fiduciary?
• What is your service structure and how much do you charge?
• What type of clients do you work with?
• Are you willing to collaborate with other financial professionals?

And here is a recap of what makes Falcon Wealth Advisors unique:

• Our Ensemble of Professionals
• We DO NOT use Investment Products whenever Possible
• We Stand by our Responsiveness

Thanks so much for joining me, Cory. If you’re reading this and would like to learn more about how we can help you as you prepare for and navigate retirement, please contact us directly. You can email me at Jake@falconwealthadvisors.com and Cory at Cory@falconwealthadvisors.com.

Clients choose to work with us to enhance their financial literacy and explain exactly what their financial plan means to them.

Hightower Advisors, LLC is an SEC registered investment adviser. Securities are offered through Hightower Securities, LLC member FINRA and SIPC. Hightower Advisors, LLC or any of its affiliates do not provide tax or legal advice. This material is not intended or written to provide and should not be relied upon or used as a substitute for tax or legal advice. Information contained herein does not consider an individual’s or entity’s specific circumstances or applicable governing law, which may vary from jurisdiction to jurisdiction and be subject to change. Clients are urged to consult their tax or legal advisor for related questions.