Who Can You Believe? Seven Signs of a Trustworthy Advisor

By Tim Koehl, CFP®, AAMS®

Wealth Manager, Principal

January 13, 2023

As many investors learned during the tumultuous year of 2020 and the difficult markets of 2022, reliable financial and market advice has never been more valuable. And yet, when the markets are experiencing wild swings such as those we saw during the pandemic or falling into doldrums as they did last year, the headlines in the financial news media can make it hard to know which information is helpful and which you would be better off ignoring. Certainly, in an atmosphere of financial uncertainty, investors tend to be more concerned about their investments and what to do. This makes it vital to have confidence in your financial advisor.

But is there a way to know whom you should trust to help you make the best long-term financial decisions? Consider the following when selecting an advisor with a brokerage firm or an investment advisory firm:

  1. Does their record reflect proper attention to regulated standards? The Financial Industry Regulatory Authority (FINRA) is the authorized regulator for brokerage firms doing business in the United States. Their free website, BrokerCheck, allows you to instantly see if the person you are considering as an advisor has a past history that suggests they haven’t taken proper care of their clients. Registered Investment Advisory Firms, such as Modera, are regulated by the Securities and Exchange Commission. A free website, Investment Advisor Public Disclosure, allows you to search RIA advisors as well as BrokerCheck.
  2. Do they provide appropriate information about the risks involved in investment? No investment, including bank CDs or even US Treasury bonds, is completely without risk. Responsible advisors are upfront with clients and potential clients about both the upside and the downside of any investment decision.
  3. Do they provide you with the information, then allow you time to make your decision? A responsible advisor will always allow you plenty of time to reflect on the information and alternatives provided. They do not use pressure tactics, rather they respect your need to ask additional questions and make up your mind at your own pace.
  4. Do they use clear language and explain things in terms you can understand? Rather than hiding behind “insider jargon,” a dependable advisor is intent on making sure that you understand the information being presented. They will go over the information as many times as you need, in order to ensure that you have all the necessary facts and that you understand what you have been told.
  5. Do they keep client information confidential? You should expect a trustworthy financial advisor to keep confidential not only your information, but that of other clients as well. Rather than “name-dropping” famous or influential people that they may work with, they will focus on you, your needs, and your concerns and do the same for all their other clients and prospective clients.
  6. Do they spend most of their time getting to know you and your needs? A professional who is acting in your best interest will always be more interested in your priorities, your needs, and your long-term plans than in impressing you with their credentials. You should work with someone who takes the time to fully understand your situation and who answers all your questions in a way that provides the knowledge you need.
  7. Do they freely provide information about how they get paid? A reliable financial advisor will fully disclose, in writing, how they are compensated for providing their services.

We are professional, fee-only wealth managers. Furthermore, we are fiduciaries. That means we are professionally and ethically bound to provide information that places your interests ahead of everything else, in every circumstance.

Modera Wealth Management, LLC (“Modera”) is an SEC registered investment adviser. SEC registration does not imply any level of skill or training. Modera may only transact business in those states in which it is notice filed or qualifies for an exemption or exclusion from notice filing requirements. For information pertaining to Modera’s registration status, its fees and services please contact Modera or refer to the Investment Adviser Public Disclosure Web site (www.adviserinfo.sec.gov) for a copy of our Disclosure Brochure which appears as Part 2A of Form ADV. Please read the Disclosure Brochure carefully before you invest or send money.

This article is limited to the dissemination of general information about Modera’s investment advisory and financial planning services that is not suitable for everyone. Nothing herein should be interpreted or construed as investment advice nor as legal, tax or accounting advice nor as personalized financial planning, tax planning or wealth management advice. For legal, tax and accounting-related matters, we recommend you seek the advice of a qualified attorney or accountant. This article is not a substitute for personalized investment or financial planning from Modera. There is no guarantee that the views and opinions expressed herein will come to pass, and the information herein should not be considered a solicitation to engage in a particular investment or financial planning strategy. The statements and opinions expressed in this article are subject to change without notice based on changes in the law and other conditions.

Investing in the markets involves gains and losses and may not be suitable for all investors. Information herein is subject to change without notice and should not be considered a solicitation to buy or sell any security or to engage in a particular investment or financial planning strategy. Individual client asset allocations and investment strategies differ based on varying degrees of diversification and other factors. Diversification does not guarantee a profit or guarantee against a loss.

Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, and CFP® (with plaque design) in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.