Crisis Alert: How to Tell if Your Financial Advisor is Actually Working for You
A sudden stock market crash reveals more than just investment performance - it shows the true colors of your financial advisor. During market downturns, some concerning behaviors may emerge.
The most extreme cases involve fraudulent schemes like Ponzi scams that collapse when panicked investors try to withdraw funds. More commonly, advisors may be exposed for recommending unsuitably risky investments or failing to properly diversify client portfolios.
If you have a human financial advisor, you should expect personalized guidance and support during volatile times. Here's how to evaluate if your advisor is truly serving your needs:
Communication Standards
- Your advisor should proactively reach out individually (not just mass emails)
- Calls and emails should be returned within 24 hours
- Regular check-ins about your concerns should be happening
Quality of Interactions
- Conversations should be two-way, not just lectures
- Your advisor should ask questions and listen to your answers
- Discussion topics should go beyond just investments
Comprehensive Support Your advisor should help with:
- Job loss implications (insurance, unemployment, severance)
- Retirement planning adjustments
- Stimulus package opportunities
- Tax optimization strategies
- Portfolio rebalancing
- Contribution timing decisions
During market downturns, quality advisors step up their service and demonstrate their value through:
- Proactive communication
- Personalized guidance
- Practical solutions
- Emotional support
- Strategic adjustments
The way your advisor responds during challenging times reveals their true commitment to serving clients' best interests. If they're not meeting these standards, it may be time to seek an advisor who will.
Your advisor should be a steady partner who helps navigate both calm and turbulent markets while keeping your long-term financial goals in focus.