As a seasoned investment advisor in Kansas City, I get asked a lot of questions. All the time. And thanks to my more than three decades of experience with different clients, I usually have some good answers for those questions. But there’s one question I never get asked, and it’s one I’m extremely well equipped to answer.
I think that people assume that if they asked me this, they’d get a biased answer. They may assume I wouldn’t tell them straight, and I would give them an answer that would suit myself better than it suited them. But as a fiduciary (and we’ll explore that a bit more later) I’d be remiss if I didn’t answer as honestly and helpfully as possible.
So, what is this question? Well, it’s the one that all my local clients have asked someone else before they find me. How do you find an investment advisor in Kansas City – one that you can really trust and rely on?
One RIA Does Not Necessarily Fit All
You know what, I think the biggest test of an investment advisor is to ask them how to find one. If they answer with something along the lines of, “Look no further, you’ve found one,” then run. Run a mile.
A good investment advisor knows that they cannot be everything to everyone. They know that not every potential client is the right match for them. They know that there is just no way that someone’s investment philosophies and working styles can align with everybody else’s.
But a good RIA knows his job well enough to know this automatically, and to know that by giving someone the tools to find the right advisor for them is the first part of his role. Especially as a fiduciary.
Being a fiduciary means that you are ethically and legally bound to put the interests of a client first. And while officially that fiduciary duty is between a professional and someone they have taken on as a client, any advisor worth their salt will see that the fiduciary relationship begins right here.
Not all RIAs are fiduciaries; it’s not an obligation. But being a fiduciary like me means that an investment advisor never chooses an option for their client because it will bring them any kind of gain, monetary or otherwise, when it is not the best option for the client. So if you’re looking for an investment advisor, their fiduciary duty to you means they should not immediately position themselves as the best option for you, whether they want to sign you up as a client or not.
Investment Advisor, Financial Advisor or Broker?
Before you go any further, you need to be sure that you’re looking for an investment advisor and not a financial advisor. You’d be forgiven for thinking that they’re the same thing, but there are some crucial differences.
Let’s explore some of those things that set all the roles apart.
A financial advisor is quite a generic term, and is a bit of a catch-all definition for someone who might offer one or many financial services. A financial advisor may offer help with general financial strategies, including estate planning, tax strategies, budgeting and saving, as well as investing. Or they might just specialize in one of those areas.
A broker can carry out transactions with a securities exchange; i.e. they actually do the trading, and are licensed to do that. They generally don’t offer any advice, but act on instruction. A broker might call themselves a financial advisor, but a financial advisor is pretty unlikely to be a broker.
An investment advisor is a legal term, so there’s a bit more clarity. An investment advisor offers advice and analyses on investments. An investment advisor really has their finger on the pulse of the markets, and a good investment advisor should be able to give reliable advice on market trends as well as on more financially strategic issues like asset allocation.
A reputable RIA can, using current market information, use their expertise to help their clients grow their wealth and use it to fund all their goals and life plans. That’s what I do, and that’s what I’m passionate about.
Three Tips For Finding the Right RIA
So now we’ve established that actually, if you want to find an investment advisor in Kansas City, I’m probably a pretty good person to ask, right? So here are my top tips for finding the right investment advisor for you locally.
#1. Look for recommendations of reputable investment advisors
This is a great starting point. If someone you know has a great working relationship with their investment advisor, fantastic. Explore this. But remember, while the advisor is a good match for your friend/family member/colleague etc, they may not be a great match for you. But certainly, positive experiences are well worth a bit of investigation.
Similarly, look online but exercise even more caution. I’m sure you’ve all come across reviews that seem too good to be true online, and in some cases they are. Your best bet when following up an online search result is to consult Brokercheck, an online tool provided by FINRA, that allows you to look up advisors and brokers to check their credentials.
You can also use the SEC site, too. All investment advisors are required by law to declare any official complaints made against them, disciplinary actions they’ve been involved in as well as their employment history and licenses. So if they’ve messed up in the past, it’s going to be listed on the SEC site. It’s a good tool to check if someone is reputable and worth your time or not.
#2. Make a shortlist of RIAs, and ask them all the same question
Make contact with your shortlisted investment advisors. Take note of how long it takes them to get back to you and schedule an appointment. Are they contacting you themselves, or is it a secretary? These first impressions are really important, as they’ll give you an indication of the commitment the RIA has to his job and his clients.
At this stage, I’d ask them to give you an idea of who their ideal client is. If you don’t recognize yourself in their response, don’t schedule that first appointment. Move on. Someone else will be a better fit for you. You need to understand at this stage if the RIA is going to be on your wavelength, if he is going to be able to understand your priorities and connect with you on a meaningful level. This isn’t too much to ask.
#3. Prepare questions for your first meeting
Before you meet an RIA for your first appointment, make sure that you are clear about what you want to get out of your time together. And make sure you are clear about your financial priorities too. Ask the RIA about how their investment philosophy will help you to reach your financial goals.
And make sure it’s you that’s doing most of the talking. At this point, the RIA should be trying their best to get to know you; they should be asking you plenty of questions, and really listening to your answers. If they’re doing all the talking, and you feel like you’re just being ‘sold’ to, finish up the meeting with a smile and move along to the next on your list.
And Finally… Why Should You Find an Investment Advisor in Kansas City?
Why stay local? It’s a very good question. If there’s anything that 2020 showed us, it’s that geographical boundaries are beginning to melt away. Now we’ve all had to get used to doing a lot more online; virtual meetings are now second nature for most of us. And it means that you can search further afield for services that you’re looking for. At first glance, it might seem that an investment advisor really could be based anywhere and be able to help you in the same way, right?
Well, wrong. There are heaps of benefits of working with a locally-based investment advisor. Firstly, while virtual meetings are all well and good and can be a really efficient way of doing business sometimes, nothing beats a face-to-face meeting. Nothing. It’s one of the bits I love most about my job too, getting out and about to see clients wherever it suits them. I learn so much about them that way too. And you can just tell so much more easily whether you’re going to ‘click’.
Secondly, a local investment advisor will automatically just know more about what it’s like to be you, to live your life where you do and in the way you do. He’ll have a better idea of the challenges you might face as well as your values. He’ll have a good grasp of your financial situation just by knowing little details; he may well be familiar with your employer, who might offer company stocks and shares as part of a benefit program.
He may well already have a sense of the neighborhood you live in, and what challenges and benefits that provides. He may well know how much it’s going to cost to send your kids to school locally. And all of that will paint a picture; it will just all feel that little bit easier because of the familiarities.
Finally, a local investment advisor will already have a well established network of other local trusted professionals. He will be able to connect you with a recommended and reputable tax advisor or estate planner, which will perfectly complement the work that you do together with your finances. You can only benefit from that local network which your RIA will connect you with.
If you are looking for a trustworthy and reliable investment advisor that serves Kansas City, get in touch. There is no guaranteeing that we’d be the right match for each other, but I’d love to find out either way. I can guarantee we’ll at least have a good chat.
Put me through my paces and see if we click – see if you think you’d like to collaborate on your wealth management strategies. If not, no hard feelings. But if yes, then fantastic: let’s do our best work together to grow your wealth and help you reach your investment goals.