How to attract a great advisor

A financial advisor’s job is to develop a plan and help you implement that plan over many years, so that you achieve your financial and lifestyle goals. This includes navigating the inevitable changes in your circumstances, markets, investments and so forth – knowing when to stick to the plan and when to alter it.Achieving your financial and lifestyle goals is an incredibly valuable outcome. Therefore, it is very likely that financial advisory fees will be a small fraction of that value.Just like in any profession, the best people are typically in high demand. Of course, when selecting an advisor, you definitely want the best that you can afford.Shrinking pool of financial advisorsAccording to research house, Rainmaker, approximately 30% (9,000) of financial advisors have left the industry since 2018. There are now less than 20,000 financial advisors in Australia.There have been lots of legislative changes over this time that have prompted financial advisors to change careers or retire, including the banning of commissions, mandatory tertiary education standards(all financial advisors must pass a mandatory exam before 1 January 2022), increasing insurance costs and ever-increasing compliance obligations and so on.The changes that have been implemented over the past few years have contributed towards lifting the bar (professionalism) for financial advisors. Of course, this is a good thing for the industry and its clients. But the result is that there is a growing shortage of financial advisors in Australia.It’s the person, not that business that mattersA financial advisor and their client have a very personal relationship. This relationship is based on a high level of trust. Therefore, it is critical that clients find an advisor they feel comfortable with. Of course, there’s a personal/emotional element to this.Second to trust is experience. Whilst it is possible to systemise some facets of the advice formulation process, what cannot be systemised or automated is experience. Experience is one of the most important and valuable benefits a financial advisor must share with you. Knowledge tells you what to do and experience tells you when and how to execute. The challenge is that experience isn’t scalable. There are no shortcuts to accumulating experience either.An advisor that has been practising for 20 years is almost always going to be more valuable than an advisor with 2 years of experience.Good advisors are rarer than good clientsThere’s a limit to the number of clients that any one financial advisor can look after. Usually, that limit is in the range of 100 to 200 clients. But, of course, it depends on the complexity of each client.It is very important for an advisor to choose their clients carefully. Of course there are some obvious commercial reasons for this, but I feel the most important consideration relates to the allocation of the scarcest resource; time. There’s a limited amount of time to share with a limited amount of clients, so it’s important that we share our time with clients that could benefit the most.The only reason I come to work each day is the personal satisfaction I receive from helping my clients. Therefore, if I work with clients that truly need my help, I maximise this satisfaction. It might seem altruistic, but the truth is that it is a selfish pursuit. Thankfully, my client and my interests are perfectly aligned.IMy new book is available for pre-order now: Pre-ordering the book will help me get it into bookstores. So please do me a favour - please consider pre-ordering now - links and pre-order bonus are available here: https://prosolution.com.au/book-preorder-bonus Do you have a question for the podcast? Email us at [email protected]. If you're interested in working with our team and me, discover how we can work together here: https://prosolution.com.au/family-office-servicesIf this episode resonated with you, please leave a rating on your favourite podcast platform. Subscribe to my weekly blog: https://prosolution.com.au/stay-connected IMPORTANT: This podcast provides general information about finance, taxes, and credit. This means that the content does not consider your specific objectives, financial situation, or needs. It is crucial for you to assess whether the information is suitable for your circumstances before taking any actions based on it. If you find yourself uncertain about the relevance or your specific needs, it is advisable to seek advice from a licensed and trustworthy professional.