When we moved to a small town in North Carolina, an unexpected surprise was that my regular mechanic now lives too far away to service our vehicles. I say it’s a surprise because he’s a mobile mechanic.
He drives around to wherever I am (except here, apparently) to fix cars. Really super-handy, by the way. I found him through a referral service because I don’t trust most mechanics.
It’s not that I think all mechanics are dishonest. But… a shocking number of them I’ve met are ignorant human beings when it comes to doing a good job (or what they consider to be a good job), don’t take their work very seriously, or they project their biases onto me. For example, a lot of mechanics won’t fix certain things on a car the right way because they’re afraid to quote the price for doing the job the right way because… it’s usually expensive to do the job the right way.
Instead, they quote a “cheap” price because that’s what *they* think everyone wants. They believe if they charge $1,000 to replace an oil gasket, no one will pay it and so instead they charge a much more modest fee to bandaid the problem and when that fails to work, they tell the customer to keep throwing oil in it and eventually to get a new car. The mechanic makes a little money for band-aiding the problem, he looks like a hero (for a little while anyway), and the customer doesn’t feel the pinch of spending $1,000. Eventually, the $1,000 fix turns into a $5,000 fix because the original problem was never solved correctly. It was only “patched up” with a temporary fix.
Meanwhile, the $1,000 fix would have saved the customer from having to spend $15,000 or $30,000 on a new car.
Instead of being unbiased and just telling it like it is… they bias themselves and thus… cost their customers more money in the long-run, and they fail to provide really good service. The cheap fix was never meant to work in the first place and if the customer and the mechanic were both being honest about the problem, they knew it would never work from the moment the quote was given.
… Which reminds me of a conversation I once had about finding the cheapest investments available on the market and then hiring a “fee only” financial planner because they were the only advisors that are “unbiased.” Also, they were “cheap” compared to an advisor who earned a commission or investment management fee.
Except… fee-only advisors aren’t unbiased. They’re the opposite. And, they bias themselves and then project that atitude onto their clients, who, in turn, believe they’re receiving “cheap advice” that’s also somehow good advice.
Anyway, if you want a for-real advisor who is unbiased, here’s what you do:
Look for someone who has replaced bias with genuine curiosity and empathy about your current financial situation.
If you find such a person, don’t waste time on how they’re paid, what letters they have after their name, or even how long they’ve been in business. And especially dont’ pay any attention to virtue signaling about how honest they are or that they always put your interests ahead of their own and other related nonsense.
Look for someone who wants to align their interests with yours (which doesn’t involve them putting your interest ahead of theirs nor their interest ahead of yours). Look for someone who wants a real collaborative relationship with you.
Aside from genuine curiosity and collaboration, look for habits and behaviors in your advisor that have directly led to success for their other clients and make sure they have “skin in the game”.
Behaviors are extraordinarily difficult to change — that’s true for both good and bad behaviors.
And so, past *behavior* is the best predictor (even if it’s not perfect) of future behavior. So, if the advisor’s behaviors have led to lasting results for clients, there’s a good bet he or she can help you achieve the same outcome (relatively speaking) as the advisor’s other clients.
In fact, one of the most powerful questions you can ask a financial advisor is:
“How do I know your advice will result in me having enough savings for my future?”
“How do I know my money will be there for me when I need it?”
“How do I know this investment idea will work out?”
In other words, ask for proof of legitimacy: “How do I know you can deliver the goods?”
Your advisor’s answer will tell you almost everything you need to know.
Speaking of knowing, if you’d like to know whether your current financial plan will work the way you hope it will, I offer a “second opinion” service. I’ll break down your current financial plan (and reverse engineer it, if necessary) so you can see exactly how it will (or won’t) work out for you.
I’ll also provide suggestions for how to improve it.
Details about the service, here: