Click below to listen to Episode 89 – Traits to Look for in a Financial Advisor

Traits to Look for in a Financial Advisor

What traits should your financial advisor have?

Finances have a way of touching every part of our life from the food we eat to the medical care we can receive, from the school we send our children to and to the housing we live in, from the charities we support and to how we can retire, and the list goes on.

With so many important factors that our finances play into, isn’t it just as important to find a financial advisor that has your best interests in mind in order to help you obtain all your financial financial goals? In this episode, Bob and Bailey cover many of the traits you should look for when choosing a financial advisor, especially the importance of choosing a fiduciary, fee based advisor over a commissioned based advisor with a potential conflict of interest.

Before finding a financial advisor, Bailey also came up with a great list based on the “12 Steps Program” used by many organizations.

1. ADMIT that you need help from a financial advisor

2. BELIEVE that getting that help is ok and possible

3. TRUST that there are good fiduciary based, financial advisors

4. INVENTORY your entire financial picture

5. CHANGE the way you think about finances

6. FOLLOW the guidance and wisdom of an experienced, fiduciary based, financial advisor

7. WORK the plan a financial advisor has come up for you

8. COMMIT to operating all of your financial life with integrity from how you give to how you spend to how you save and invest to how you pay people

9. WALK in financial freedom and peace, stewarding your money with wisdom and care

HOSTED BY: Bob Barber, CWS®, CKA®
CO-HOST: Bailey Theaker

Mentioned In This Episode

Christian Financial Advisors
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Bob Barber, CWS®, CKA®
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Bailey Theaker
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EPISODE TRANSCRIPT

[INTRODUCTION]

Welcome to “Christian Financial Perspectives”, where you’re invited to gain insight, wisdom and knowledge about how Christians integrate their faith, life and finances with a Biblical Worldview. Here’s your host Christian Investment Advisor, Financial Planner, and Coach, Bob Barber.

Bob:
Well, Bailey, do you realize this is our 89th podcast? We’re about to head into number 90. Can you believe that?

Bailey:
Goodness. That’s a lot of different topics we’ve covered.

Bob:
That’s a lot of work. So what are we going to talk about today?

Bailey:
Today, Bob, we’re talking about the traits to look for in a financial advisor.

Bob:
The traits to look for in a financial advisor. That’s going to be a good one. What kind of traits would you look for if you were looking for a financial advisor?

Bailey:
Well, I’ve said this to you before, but I really believe that a financial advisor serves as a shepherd for people to guide them through making wise decisions with their finances. I do think that everything we do is spiritual and everything that we do should have wise counsel speaking into it. So that’s what I would look for in a financial advisor is somebody who’s going to shepherd the finances that we’ve been given by God so that we can steward them really well.

Bob:
That’s beautiful. I tell you, that is awesome the way that you said that. I always tell people, Bailey, that for a Christian especially, financial decisions are spiritual decisions. They need to be prayed about. So stewardship is really a big deal with you. I’m glad that it is because it’s always a good idea to have wise counsel. There was a question I was thinking about when we were going to be doing this podcast today, and I was going to ask you. We’ll put you on the spot here.

Bailey:
Usually I’m the question asker.

Bob:
Yeah, I know. But I’m going to ask you a few in the beginning, if all of the sudden you had a wealthy uncle leave you $300,000 or even 3 million, that’d be quite a bit for you, wouldn’t it?

Bailey:
Be a surprise for sure.

Bob:
What would be some of the first things that would go through your mind?

Bailey:
Well, the first thing that comes to mind is that I would want to share the new found wealth. Like I just immediately have some of the needs of our church family popping into my head. And so, I think I would want to care for those needs first and then probably pay off some debt that we have.

Bob:
You are so different, Bailey. A lot of people what’s going through their head is how big a house can I buy now or how about that new car? And you’re here. You’re thinking about others. That is such a great trait that you have, by the way. That’s awesome just to hear you say that. Wow.

Bailey:
Well, thanks. So everything else is temporary.

Bob:
Oh, wow. So, you wouldn’t be thinking about how can I invest it, huh?

Bailey:
Maybe not right off the bat, but we’d get there pretty quickly, I’m sure.

Bob:
You think about this. If you had never worked for this firm, would you seek out the advice of a financial advisor or would you try to handle some of this wealth on your own? I’m asking this to… I’m sorry. I know you’re a millennial… but I’m asking this to a 26 year old, and I’m just wondering what your age group would do if you came into this kind of newfound wealth.

Bailey:
Hmm. Well, I can only speak for myself, but I know that my husband is a researcher. And so he would, I mean, he would be reading every book he could get his hands on. He would be doing a ton of research trying to find out what the wisest way to handle our finances is, and he already does that. And then I would probably, and my husband might hate me saying this, but I’d probably go to my daddy first because I know my dad just has a lot of experience with finances, and he works in the financial industry. And so, I would go to him for advice and he would probably recommend that I go see a licensed advisor.

Bob:
It’s interesting what you said there, because I believe that’s what most in your age group would do. They would go do the research on their own. They wouldn’t first think of a financial advisor. But then you would go to your dad, which is very wise. And I commend that. That’s a trait, again, that a lot of people your age are not going to do that. They’re not going to go to their parents and ask, but you would do that. And he would give you some, I mean, that’s some wise counsel I think he would give you. So I like the answer, but a lot of people never think about using a financial advisor, or they think they don’t need one. I know along those lines of thinking, maybe I don’t need a financial advisor. I can just go do that research myself.

Bob:
And as you and I were talking about this and putting this podcast together, which we are tackling such hard subjects on this podcast the last few weeks or not last few weeks, last few times, last few months. I know you came up with this idea that you took from the theory of the 12 steps program, like this using AA and it’s using other types of programs. And a lot of people understand that. They’ve heard of the 12 steps program that is used by many organizations, and you actually added a financial twist to this. So I want you to share this because you started listing these down, and I was very impressed with that.

Bailey:
Yeah. So the 12 steps program, which was originally designed for AA and things like that, I actually saw it implemented in a church setting based on the belief that everybody needs help, that everybody needs help all the time in life in all the areas of life, and finances is just one of the areas that we can use the 12 steps in. And so, as I kind of went through these steps, I think it’s important to recognize that these steps also apply to finances. The first one would be to admit that you need help from somebody who knows, from a financial advisor. And so the first step would be to admit that I need help. And I can’t do this on my own.

Bob:
That’s just hard to do by the way. Very hard to do for a lot of people to finally admit it. Yeah, I need help.

Bailey:
And then the second step would be to believe that getting help is okay, and that it’s possible that you can find wise people to ask these questions, and you don’t have to do it alone. The third step would be to trust that there really are good fiduciary based, financial advisors out there that care about the interest of their clients.

Bob:
They don’t realize that, though.

Bailey:
Yeah. I don’t think that’s what we’ve been taught because there’s so many businesses that are going to try and sell you something all the time. And so finding someone who’s really looking out for you.

Bob:
I want to touch on that later about that. There’s good, fiduciary based financial advisors, because there are. There’s a lot out there, but you have to kind of pick through it to find those.

Bailey:
And then step number four would be to take an inventory of your entire financial picture by writing down all your assets, your debts, your income sources, and just the entire picture, getting it down on paper, and then you have to be willing and ready to change the way you think about finances, which should be the fifth step, to change the way you think. And the ways that you do that, number six would be following the guidance and wisdom of an experienced, fiduciary based, financial advisor. So you actually have to be willing to not only go find the help, but then to listen to it, to listen to what they have to say and trust that they’re pointing you in the right direction. Number seven would be to work the plan that the financial advisor has come up with you. That’s something that I didn’t realize about advisors is that they don’t just make a plan and throw it at you and expect you to figure it out. They make it with you based on your life and your picture. It is really personal.

Bob:
It does take work. It’s not something that you just come up with and you say, oh, that’s all well and great, but you have to work it and you have to do what the plan is guiding you to do.

Bailey:
Hmm. And then number eight would be commit to operating all of your financial life with integrity. And that’s from the ways that you spend to the ways that you save or how you give or how you pay people and invest all of those things being done with integrity. And then last would be to walk in freedom and peace in the area of your finances that’s available. It comes through following those steps. So, you can steward your money with wisdom and with care, and then learn to walk in financial peace and freedom.

Bob:
Wow. You just blew me away. Wow. Qe’ll put this on the podcast website, what Bailey has shared that she came up with. I noticed that was 9 that you took out of the 12 steps. And so we’ll make sure and get that on the podcast website. When you go to Christianfinancialpodcast.com, if you’ll scroll down, we always have our script in there. We’ll make sure and have all of those nine steps. That’s really great, Bailey. I’m amazed that you did this and applied it to finances, and I’m so encouraged by the way you’re picking up on all this in such a short period of time. You’re a sharp cookie.

Bailey:
Well, thanks Bob. You’re a good teacher.

Bob:
So, let’s talk about some of those traits to look for in a financial advisor, especially for a Christian. This is Christian Financial Perspectives. That first thing that I think you should do when you’re looking for a financial advisor, as a Christian, is look at scripture. 1 Timothy 3:1-12 is talking about the traits of an elder and a deacon, so a leader within the church. But I like to take these traits, as we’re talking about traits to look for, and these traits are awesome. I’m going to let you read off what I’ve written down here, some of these traits.

Bailey:
Yeah. Traits like they are faithful to their spouse. They’re hospitable. They’re able to teach you. They’re not addicted to wine. They’re gentle. They’re not greedy, which seems like a really big one in this industry. They’re well-respected in their community. They’re a strong believer in truth. And they’re being known as a trustworthy person.

Bob:
Those are incredible traits. We’re going to go through many more traits, but you can just follow these and take the scriptural guidelines and look for an advisor that lives by those characteristics, that lives by those traits. I don’t see how you can go wrong because they’re well-respected. They’re a strong believer. They’re known as being trustworthy. Those are really strong character traits that all of us strive to be like and more. So next, we want to look for a financial advisor that has a lot of experience, that this is a trait you want to look for, experience and longevity. And what I mean by this – first, I don’t want to put down to anyone who’s young and just getting started or only has a few years of experience, but you need to seek financial advice from someone that has roots in the community, that’s put those roots down, so you know they’re not going anywhere, and one who has the experience necessary to give you good sound advice. And if it’s a younger advisor, if he has a mentor over him or her, then that’s good. I say this from an older guy that’s been doing the same thing for many, many years, and that consistency is so important. And when it comes to handling your finances, you don’t want somebody that moves from here to there, to there, to there, to there. You want somebody that has those roots down. I mean, I do. If I had somebody helping me, I would want somebody who has roots down because I’m like, where would they go If they they didn’t? And as an example, I own the building and we’re all from here, and we have our roots in the community.

Bailey:
Right. And how long have you been in this community doing this, Bob?

Bob:
Remember I was in real estate and investing my first four to five years. And so, if you were to count that, it’s coming on 36 years.

Bailey:
Wow. Talk about roots.

Bob:
Yeah, yeah, it is. And then my family goes back many generations back in this area on top of that. When I say roots in the community, because we serve people nationwide, but still they want to know that you’re there and you’re not going anywhere.

Bailey:
And then third would be to look for a financial advisor that is personally, financially successful themselves. And you want to find somebody who has found financial success in their own life and has done it with honesty and integrity, not by selling commission-based products or by kind of sneaking their way into it, but somebody who’s done it well and honestly and honorably,

Bob:
When we talk about this trait that they’ve been personally, financially successful themselves, I want you to think of it totally outside the realm. Think of it a if you’re going to hire a coach. Let’s say you’re a baseball pitcher, and you’re going to hire a coach. You want to hire a coach that knows how to coach you and has been successful himself, maybe been a pitcher himself and was very successful. You want to soar with the eagles, if you catch my drift in there and not hanging out with the turkeys, not that turkey’s bad, especially around this time of year, but anyway, you want to inspire to be those that have done a successful job at what they’re doing.

Bailey:
Somebody who’s walked the road before you. You don’t want to be blindly led down a road that somebody has never walked.

Bob:
Another trait that I have here is to look for a financial advisor that surrounds themselves with a talented team of people, because I just really believe this. No successful person does it by themselves. They have a good team behind them and people around them that are helping them. It’s just so important. And you want to get to know the team members as well, because when you’re looking for that financial advisor, that financial advisor may be on vacation. They may have an illness come up or family that they need to go help. They need that team there. And you need to know that team is there to help in case he or she is not in the office or is unavailable for a couple of weeks because you need answers. In the financial world, answers need to come quickly because things are moving quickly all the time. That’s why I’m just into it all the time. Also, you want to look for a financial advisor, and we talked about this earlier, that acts in a fiduciary capacity.

Bailey:
And what does that mean?

Bob:
What that really means is that the financial advisor is all about making decisions for what is in the best interest of the client, not his own or her own, not their own interests. And that’s what a fiduciary is. That’s why we choose not to be commission-based here. I don’t want to have any conflict of interest. I don’t want a company saying, hey, we’ll pay you a big commission if you’ll sell our product, because that can create a conflict of interest. And that’s not saying that all commission-based financial advisors are not great people, not at all, but I don’t even want that in the way. I don’t want that to get in the way of making a decision about a company having an influence over me.

Bob:
I even know that many companies, if you will sell a lot of their mutual fund or their product will send you on trips or send you big gift baskets, things like that. We don’t get that here because we don’t make a commission by what we sell. We get paid by the client. We’re not paid to sell you something. So if the client is paying us, our allegiance is to the client, not to whatever we may invest in. Does that makes sense?

Bailey:
Because their success is your success.

Bob:
It’s true. And that’s why if we’re paid, as an example, a small percentage, and usually that hangs around the 1% to 0.5% range of what the assets are under management and we’re managing those assets, and I do this very actively around here. I have a very strong vested interest in the assets rising and going up, but I don’t want to take a huge risk to do that either because we have downturns in markets, and it will hurt us as bad as it hurts the clients. So, we’re on the same page as the client.

Bailey:
Sure. And something that I’ve noticed that I think is really unique about that kind of fiduciary based relationship is that it changes the conversation between you and the client because you really are for their best interests. And so, you care about the person. You care about them and their success. And I’ve watched clients walk out of our office kind of surprised by that relationship, “Wow. I just met with an advisor, and they seem to actually care about who I am and how things go for me.” And so, when their success is your success too, the way that you manage their assets change because you think, I know them. I know their family. I know what their life looks like. And I just think that’s really unique and really beautiful.

Bob:
We have to, and we have to know what all the goals are and the dreams and the entire financial picture. It’s like a good doctor that’s going to do surgery on you. He needs to know your entire physical health before he goes in and starts making decisions that are going to affect you for the long-term. And last for today, look for a financial advisor that really does, along those lines, seek to understand you, your background, your personal situation, how you got to where you are today, and then how long that took, then comes with truly an individualized personal solution and advises you and helps guide you through all the financial minefields that life throws at all of us.

Bailey:
Since working here and in my personal life, I’ve noticed that money has a way of touching all the areas of your life. Nothing is safe. Everything is affected by this thing. And that includes your family, your career, where you live, what kind of car you drive, where your kids go to school, how you give, if you want to retire, and how you’re going to do that, just everything that you could possibly think of. It’s touched by money.

Bob:
It really does. I mean, you named so many things. I was just thinking of some others like how you spend your vacations. You said how you give and your tax bracket, even how you vote, how you interact with the world, how you can retire, if you retire all. So yeah, and most people, as we come to the end here, they really feel most comfortable with picking a financial advisor that is as financially successful as themselves, or even a lot more. And that really makes sense. So bottom line, there’s a lot of different kinds of financial advisors with different specialties. And whether that is picking Christian Financial Advisors or another firm, pick one that understands you, that will cater to your best needs and yours best interests from a fiduciary standpoint. Because really, this podcast is about helping you connect with an advisor that will serve you best by asking the right questions and looking at the traits that we’ve talked about today to help you decide.

[CONCLUSION]

That’s all for now.

We invite you to listen to all of our past episodes covering many financial topics from a Christian Perspective. To make sure you don’t miss any of Bob’s upcoming episodes you can subscribe to Christian Financial Perspectives on iTunes, Google Play Music, Spotify, or Stitcher. To learn more about integrating your faith with your finances, visit ciswealth.com or call 830-609-6986.

[DISCLOSURES]

Investment advisory services offered through Christian Investment Advisors Inc. DBA Christian Financial Advisors, a registered investment advisor. Comments from today’s show are for informational purposes only and not to be considered investment advice or recommendations to buy or sell any company that may have been mentioned or discussed. The opinions expressed are solely those of the host, Bob Barber. Bob does not provide tax advice and encourages you to seek guidance from a tax professional.