How Not to Hate Your Financial Advisor

Dear Friends,

When I posted on the socials asking what irks you about financial advisors, I got an earful. There is a lot to hate: self-interest, jargon, condescension. Worse, you are alienated from your assets.

It doesn’t feel like your money anymore.

That makes me sad because you deserve to have an intimate relationship with your wealth, and I hope this issue rekindles that spark for you.

And for those of you without a financial advisor, keep reading. There’s info you’ll find useful in managing other expert service providers, like lawyers and accountants, or even your plumber.

A big thank you to all of you who shared your hot takes. Your social media posts are the heartbeat of this newsletter.

If you are willing to share money stories about growing up as the child of immigrants, being a scholarship kid, or growing up without a financial cushion, hit me up. Have been thinking a lot about inherited money mindsets lately.

Live long and prosper, 🖖

Mariko

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I posed a not-so-innocent question on social media:

“What's the one thing you hate most about financial advisors/financial educators/financial services?

Don't be shy. Let it rip.”

And boy, did you ever.

You didn’t trust them, understand them, liked the way they treated you, and worst of all, felt they came between you and your money.

Whew.

That’s some pretty loaded stuff.

The good news? It’s an easy fix.

The bad news? It’s on you to fix it.

When we let our money be a reflection of our inadequacies, insecurities, shame and self-judgments, we are living a nightmare —

Our wealth-building bus swerves around hairpin curves while the driver cackles maniacally, and we sit in the back, white-knuckling the armrests and praying out loud. The true horror: we’re also footing the bill. 🤦🏻‍♀️

“Give them pleasure — the same pleasure they have when they wake up from a nightmare.” 

– Alfred Hitchcock

Let’s talk about what’s happening in your hellacious financial bus ride, and how to wake up with your hands on the wheel.

Nightmare #1:
You work with untrustworthy financial advisors 

In your words, “They only sell proprietary products,” “They aren’t a fiduciary” and they act in their “self-interest”

Solutions:

1. Only hire a fiduciary
(Someone bound to act in your best interests).

Anyone can call themselves a financial adviser, but not everyone HAS to act in your best interest. This allows for opaque fees and the dodgy behavior of wolves in sheep’s clothing. Not all stockbrokers are evil, but no stockbroker is a fiduciary. Here’s a useful article on who’s a fiduciary and why it matters.

2. DIY your investment portfolio. 

For a lot of people, a simple low-cost target date ETF fund from a reputable firm like Vanguard or Fidelity will do the trick. There are also lots of trustworthy and free DIY educational resources that don’t require you to become a finance wizard.

Also consider that you may need financial planning, rather than an investment adviser. If so, go for a fee-only certified financial planner. Having a life financial plan is different than investing – your portfolio is just one aspect of cultivating your riches.

If you can research that dream vacation for months or spend hours spec’ing out the perfect dishwasher, you can learn enough to be financially literate. You got this!

3. Fire your untrustworthy advisor.

If you feel like you’ve been slimed every time you talk to your advisor, honor your gut. You wouldn’t entrust your kid to a creep who makes you uneasy – do the same with your money.

Is it a pain in the ass to find someone new? Yes. Is your money being in good hands worth the trouble? Absolutely.

You aren’t going to hurt your advisor’s feelings – it’s just business and they’re used to it. But even if they were sensitive, what’s more important – preserving your assets or preserving their ego?

If you’ve been raised to be a people pleaser, this can be tough. You’re used to letting other people’s needs come before your own and you’d rather self-sacrifice than risk displeasure, or create conflict. Ask me how I know. 🙄

But by standing up for your money, you’ll also be standing up for yourself. Change your relationship with money and you’ll change your self-concept.

Nightmare #2:
They don’t want you to understand them

Here’s what you said:

“They don’t talk to me in plain, simple terms that I can understand as a novice. Give me the “Investing for Dummies” version. Or the Cliff notes.”

“I find what I call “Market speak” very annoying, that’s where someone spends half an hour speaking in stock market jargon to tell you they have no idea what the market is going to do.”

Your financial advisor, having become fluent in jargon, refuses to speak English with you. As a result, you stagger out of meetings feeling like a concussion grenade has exploded in your head.

It’s not your fault.

You’re just having a Four Horsemen of the Communication Apocalypse nightmare:

Manipulation:

Jargon wielders want you to believe that investing is way more complicated than it is. Betting on how the future will unfold is daunting and imperfect, but explaining what happened to your money is not. But if they get you to believe investing is super complicated, you won’t be tempted to do it yourself or to question whether the fees are worth it.

Dominance:

It’s a power play, like King Kong roaring and beating on his chest. It’s to knock you off balance so you feel stupid and won’t question their performance, fees, or humanity. It’s a form of intimidation. Since you’re the client, this intimidation is 100% unnecessary, unless it’s …

Ignorance:

Your advisor doesn’t truly understand it either and is just parroting what they’ve read or heard. True experts can explain the most complicated things simply, just like celeb scientist Richard Feynman did when he explained the cause of the Challenger disaster using an O-ring and a glass of ice water. 

Or they just don’t know any better.

They believe that being a subject matter expert gives them license to fling fifty-cent words and poor syntax at you. But you’re the client, so you get to decide the ratio of bad communication to good investment returns you’re willing to tolerate.

Obfuscation: *fifty-cent word

It’s a lot easier to hide what’s really happening by throwing up a smoke screen. Maybe a bunch of stocks just blew up, in the bad Wall Street way, not the good Hollywood way. Maybe they’ve got a bunch of high-fee, high-commission products in your portfolio. Maybe they forgot to invest that cash contribution you made.

How to wake up from this weaponized word nightmare:

First, get in touch with your inner Kindergartener. Little kids are question machines. Why is the sky blue? How can lizards grow their tails back? Why is my money shrinking?

Check your ego at the door.

Pretend you know nothing at all and that you’re infinitely curious.

Ditch the shame about your lack of knowledge and own your responsibility towards the wealth you’ve worked hard to accumulate and are fortunate to possess.

Good financial advisors are delighted to partner with you when you are interested. If they get excited and start talking in tongues, just remind them to speak to you like you’re a golden retriever. 🐕 *obscure reference to the movie The Margin Call 

It’s their duty to explain things so you can understand.

If your child was about to be operated on by a brain surgeon, you’d want to know exactly what was being done, the surgeon’s credentials, and what the risks were, even if you didn’t go to medical school.

Activate your inner mama bear when it comes to your money, even if you flunked math in high school.

Know the difference between open- and close-ended questions

And deploy them strategically.

Ask a close-ended question when you want a precise answer.

For example, if you wanted to know how much it would cost to manage your account:

You: What are the fees and expenses?

Answer.

You: Are these ALL the fees and expenses I could be charged?

Answer.

You: So there are no ADDITIONAL charges possible?

Answer.

Tailor your response to the quality of the answer you get. Is there hesitation? Does it feel glib? Are you getting an answer 10x longer than necessary? Is there an attempt to change the topic and move things along?

If you don’t get a precise answer to a precise question, keep asking until you pin the answer down, and then repeat it to get confirmation. E.g. “So I will never pay more than X in fees and expenses?

Ask an open-ended question when you want to assess holistically.

Channel Oprah and see where a question about their investment philosophy takes you. Find out how they’ve come to that belief system and how they build portfolios and how they make decisions. Look for passion and humility. Do they love investing? Or are they in it just for the money?

Ask them to walk you through a day in their work life. You want to get them to relax and go off script. Just be sure you’ve set your bullshit detector to 11. *obscure reference to This Is Spinal Tap a rock mockumentary

Evaluate whether their approach is compatible with how you look at life.

If you’re a super quantitative person you’re going to want a quantitative approach. If you’re a rocket scientist you’re going to want someone who can keep up with you. If you value a long-term approach and hate paying taxes, stay away from the advisor who trades like a ferret on Benzedrine.

Nightmare #3:
Your advisor treats you “like a backseat nothing, you’re tired of this...”
*obscure reference to a Del Fuegos song

Here’s what you told me you despise about financial advisors:

Defining their job as primarily about anxiety prevention. Everyone I've talked to was patronizingly hand-holdy or has talked about money stress (until I stopped them) — which yes, is a thing, but not my thing, and not why I'm talking to them. I'm not stupid, and I'm not talking to them because I don't want to deal with money. If I don't understand it, I'll learn. I've always been too polite to say it, but I have to wonder if it is the advisor who has anxiety or doesn't completely understand. To me, it's more than a little fishy when they say, "Don't worry about it. It's complicated. It doesn't matter why, this is just the way it works." Or, the worst one ever... "Just don't open your statements, and let me take care of it. I promise it will all be okay.

They never give me reports the format I find most useful, no matter how often I ask.

Using terms like “we only have to pay x amount in taxes”; we are doing great with our investments; We. We. We. If it is “we”. Then the advisor should help me pay my tax bills. 🤣

You’re the client.

I repeat.

You’re the client.

Follow the money.

You pay.

They serve.

You deserve respect.

When I see ads by male advisors for “Wine, Women and Wealth” seminars with pictures of women doing yoga on the beach, I know they’re not going to respect me as a client. It takes more than alcohol and cliches to get your hands on my wallet.

You deserve to be treated like a grown-ass adult.

You’re not a child, and they’re not your daddy. Trust should be earned, not handed over on a platter to an authority figure. To suggest otherwise is malpractice at best, a con in the making at worst.

You deserve your money to be treated like it’s yours, not theirs.

Partnering with their clients is great, but overidentifying with your money is a boundary violation. It’s not their money, and when they forget that – or try to get you to forget that so you won’t leave – it’s a sneaky way to get you to outsource your sovereignty.

You deserve to get the information you want in the form you want.

There are reams of data available at the push of a button. It’s easy enough to automate the export what you want into a spreadsheet. “All that is required is the will to do it.” *obscure reference to the movie Dr. Strangelove Or: How I Learned To Stop Worrying And Love The Bomb

Our institutional clients got whatever information they requested in the format they wanted. I can understand not wanting to produce custom reports for thousands of clients, but setting and forgetting an automated data dump is not an unreasonable ask.

Remember, you are a CLIENT, not an IMPOSITION.

Nightmare #4:
My money doesn’t feel like mine anymore

This one just breaks my heart.

It’s your money.

You get to do what you want with it.

To be fair, an financial advisor may need to raise cash and rejigger the portfolio, so having a sense of the timing and size of cash withdrawals is useful, for portfolio management purposes.

You do want them to share their concerns if your withdrawals are jeopardizing your financial goals.

Aging can bring with it a loss of cognitive function, and financial planners will ask you to tell them who to notify should you need help managing your affairs one day when you’re impaired.

But you should never feel like a little kid begging for your allowance from your advisor.

If they are doing anything to create that feeling in words or actions, please call them out on it.

And if you’re the one who’s giving your power away, stop it.

I get it. Some part of us longs to be taken care of in the ways were weren’t when growing up. Some part of us wants to jettison adult responsibilities. There’s ease in being told what to do, but fear and shame can be so easily triggered in us when we do that.

Be kind to yourself. If it means fewer, larger withdrawals so as not to feel shitty about asking for your own money as often, then do that.

The pleasure of awakening from a nightmare is yours to have at will.

No amount of praying or clutching at armrests will substitute for you grabbing the wheel of your finances.

Whatever you wouldn’t consent to someone doing to your kid or to your body, also applies to your money.

Gaslighting, shaming, boundary violations can be disguised under “professionalism” and the outsourcing of your sovereignty.

Reclaim your money and reclaim your power.

You got this. 💪