Valenti Hanley PLLC

Should you fire your financial advisor?

A smart investor is an educated investor. While you trust your financial advisors to a point, you still always have to be on the lookout for problems.

When do you know it's time to fire your financial advisor and hire a new one? Here are some of the biggest "red flags" you should know how to spot:

  1. You're concerned about self-dealing. If your financial advisor doesn't always seem to have your best interests in mind and you believe that they're benefiting on the side from your transactions, you obviously don't -- or cannot -- trust that person. Move on.
  2. They're very pushy about investments or financial products. You are ultimately in charge of your investments, and a good financial advisor will respect a client's limits. If you're being steered hard toward certain investments, you need to be suspicious of ulterior motives.
  3. They're unclear about how they are paid. Remember that "fee-only" advisors (those who make a flat fee on their services or earn a salary) aren't making more per the product like those on commission or bonuses do. That doesn't necessarily make other fee structures wrong, but you should be concerned if your financial advisor isn't candid about it.
  4. They cannot clearly explain the products they are steering you toward or the investments they want you to make. They may not even have a clear explanation as to why you should invest. Never trust a financial advisor whose best explanation is, "Trust me."

If you suspect that a current or prior financial advisor abused their position of trust and defrauded you through self-dealing or some kind of fraud, don't hesitate to seek legal representation. These issues are too complex to handle on your own.

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Valenti Hanley PLLC
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Louisville, KY 40202

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