Spotting Problematic Personalities of Rogue Advisors

Finding a trustworthy and competent financial advisor is essential for securing your financial future. After all, they play a vital role in helping you make informed decisions about your money, investments, and long-term financial goals.

But how can you separate the wheat from the chaff? How can you identify problematic personalities that might indicate an advisor isn't the right fit for you?

We’ll find out in today’s episode as we explore how to identify “The Ghost”, “The Jargon Juggler”, “The Chameleon”, and several more. And what should you do if you encounter them? Join Ryan as he explains the different types of personalities that likely won’t be a good fit in the long run.

Here's some of what we’ll discuss in this episode:

• What kind of communication should you expect from an advisor?
• Some of the things that an advisor might do up front that might raise a red flag.
• Why jargon and a think financial plan doesn’t necessarily indicate a knowledgeable advisor.

Full Transcript:

Ryan: Retirement planning is complex, and you just can't go willy-nilly about it, for lack of a better term. You have to really take the time and making sure that you're putting things together the right way.

Announcer: When it comes to financial planning, you need to cut through the jargon so that you can understand how to achieve your own retirement success. This is Candid Conversations: Retirement Talk with Ryan Cravitz of Cravitz Financial and Insurance Solutions.

Ben: Well, glad to have you back on the show. This is Candid Conversations: Retirement Talk with Ryan Cravitz at Cravitz Financial in Orange, California. Got a good show for you today.

Ryan, I think people just think, "Hey, a financial advisor. You guys are all the same, right? I mean, you can work with anybody and it's all the same." But not only do you have different services and different specialties, but you guys also have a bunch of different personalities, right?

Ryan: Yeah, that's definitely true.

Ben: We're going to dive into that today and talk about some of the problematic personalities of maybe some financial professionals you would probably prefer to not work with, and hopefully we'll point you in right direction today. But if you have questions for Ryan, always encourage you to log on, CravitzFinancial.com. Best place to do that, or you can call 714-462-9155.

How's the summer treating you so far?

Ryan: Summer so far is good. I'm glad it's here. We go through that May gray or June gloom they call it here every single year, and we're always waiting for the clouds to go away and looking for the sun. But on the other hand, we also know it's going to start getting real hot, so we get patient during that time. And then once July hits, it usually starts getting sunny. And the last week or so, it's been warm, so we've been down at the beach doing things outside. I'm looking forward to the first barbecue of the summer.

Ben: Nice.

Ryan: Hasn't happened yet, but we'll get there.

Ben: I always wonder, for somebody that lives near the beach like that, how often do you actually get out to the beach and spend time there? Is it four or five times a week, or is it because it's there, you don't worry about it as much?

Ryan: Yeah, that's an interesting question. For us, because we play beach volleyball as a hobby and have for years, we're down there almost every weekend, usually just one day, maybe Saturday or Sunday, not both. But the interesting thing is that because we go down there so much and we have the annual parking pass and makes it real convenient, that the time when we least like to go down there to play volleyball and such is during the summer, which surprises a lot of people. And the reason is because it can get so hot and it also can get so crowded. We have to get there early in the day in order to make sure that parking's easy and all that sort of thing.

But the fall and the spring is the absolute best time because it's not very crowded, and it's easy just to get down there, get a cord, and have some fun, and even in the wintertime, because as you know, I mean, it does rain from time to time, don't get me wrong, or it gets too windy, but most of the year you can get down there and really enjoy yourself.

Ben: That's awesome. Well, very good. Hope you listening are having a good summer as well. And today we're going to talk, as I mentioned, about some problematic personalities for advisors, because you want to find someone that's trustworthy. You want to find someone that's competent, because it is essential for helping setting you up for financial success in the future. And they play a vital role, you do, Ryan, and others in your professional place, such a key role in helping people make different informed decisions about money, investments and their financial goals as well.

I just want to point out some of these problematic personalities that might indicate, "Hey, look, maybe you should just maybe meet with someone else. Give someone else a chance. This might not be the perfect fit for you."

Let's talk about the ghost. I'm just going to list them out, Ryan, the different personalities. You tell me what these different personalities are and what kind of advisor this is. Let's start with the ghost. I like the name, the ghost. It seems like a cool person you want to work with, but maybe not for what they actually provide service-wise.

Ryan: Yeah, maybe not so much. It's good for maybe a Halloween costume or Casper or something like that, I guess. But that type of advisor disappears after making the initial deal. They're nearly impossible to contact or get ahold of, even when you have a pressing question or concern.

It often baffles me that people will start working with an advisor and they tell me stories of how they called their advisor, they wouldn't call them back, they called them two or three times over the course of a few days, and they still won't get a call back, and they continue to stay with that advisor. And I don't understand why. It's often baffled me over the years when I've heard those stories. And I don't know what the reason is, but I will tell you that if you're experiencing that, your advisor absolutely should be calling you back.

And every advisor's going to have a different way of doing it, but I can tell you for me, if you're a client, you're either getting a call back the same day ... I mean, certainly on an urgent matter, you're getting a call back on the same day ... but if it's not so urgent and it's just important that we take care of something, at the latest, you're getting a call back within 24 hours. To hear these stories of advisors just not calling them back, and even worse, that people stay with them, that's concerning to say the least.

Ben: Yeah, so 24 hours is a good ... I mean, that's a good, I guess, benchmark, right? If you're not having someone contact within 24 hours, it might not be a red flag necessarily, but that's a good standard to hopefully have your advisor follow.

Ryan: Yeah, for sure. I mean, if I got a voicemail and it's, "Hey, just have this little issue I want to take care of. Give me a call when you have a chance," that's getting the call back within 24 hours, that sort of thing. But if it's a, "Hey, this is urgent. Please call me," that's getting a call back same day.

Ben: Yeah. Okay. All right. That's the ghost. What about the one trick pony?

Ryan: Well, if you're being told that all your financial fears and all your problems can just magically be solved by the financial product that's being dangled in front of you, you have to be careful, right? I mean, planning for retirement is complex, and it's where that one product meets all your needs. If you've talked to an advisor for less than 15 minutes, for instance, and already he or she already knows just this perfect solution for you, that's definitely a red flag. I mean, not just probably a red flag, that's definitely a red flag. After 15 minutes, there's no way that you can know exactly what type of plan is going to be appropriate for somebody for the rest of their life, at least not as a starting point.

There's a good chance that if you experience that, they probably do the same type of thing with everyone or recommend the same exact thing to everyone. Really, it would be very rare to get any specific recommendations in the first meeting, because really a first meeting should be all about gathering the information and understanding the situation and that sort of thing. And then typically in the second meeting, that's when in my practice, that's when we'll start to put together a first draft of the financial plan, of the retirement plan, and then we can make some tweaks in the next meeting after that and such. But it's a process. Retirement planning is complex and you just can't go willy-nilly about it, for lack of a better term. You have to really take the time and making sure that you're putting things together the right way.

Ben: All right. We're talking about problematic personalities that you might find from an advisor in this industry. There's a lot of buzzwords that are thrown around you. I mean, you find them everywhere. It's just part of learning and understanding what's happening out there in the financial world. But those advisors that lean on that a little too much, maybe, we'll call them the jargon juggler.

Ryan: Yeah. This one's the advisor that confuses clients with just a barrage of technical financial terms, different jargon, different buzzwords, and I think they do this to mask really a lack of clarity that they have or an understanding and transparency about what they're talking about.

Keep in mind there's jargon in every field. If you're talking to a doctor or a dentist or an attorney or engineer, whatever it is, every professional, there's different jargon that they are used to, and for them, it's just a common part of their language. And so if you're working with somebody, and as I always say, if you can't explain something simply enough, that's a good sign that they don't understand it well enough. You want to make sure that whoever you're working with, that they're explaining things in terms that you understand.

And here's the other thing. If you don't understand because they're using this jargon, call them out. Say, "Hey, look, I don't understand. I think that's maybe a real financial term. Can you explain that to me?" Don't just nod your head, pretend like you understand. I mean, call them out on it. Make sure that you really do understand, because otherwise things get lost in translation, and it can come back to bite you later because there's a misunderstanding really of maybe what was talked about.

Ben: Yeah, it's easy to just say, "Oh, I don't want to sound stupid. I'm not going to ask what that means." But as you point out, don't be afraid to ask questions. That's part of the process.

All right. What about the conversation hog, Ryan? I got a pretty good idea of how this person operates.

Ryan: Yeah, exactly. If most of the initial conversation with an advisor consists of him just talking about his company, his background, his credentials, and his favorite stories, that's a problem. In most cases, you should be doing most of the talking in an initial meeting. I mean, how can someone put together a retirement plan that's customized for you without knowing a lot about you? Really, that first meeting with an advisor, maybe they'll take a few minutes to give you some background as such, but most of it, they should be asking you questions to understand you and your situation and figure out how they can help you and if they can help you.

Ben: All right, so the conversation hog, probably not the person you want to try to spend some time in their office with, and you get a pretty good idea of if that person is that way early on, I think, with them hogging the conversation.

All right, the expensive but empty suit. I guess this is the person that looks the part but might not have a lot of substance to back it up.

Ryan: Oh, yeah, exactly. I mean, don't be fooled by the advisor who spends most of his time trying to impress you by having expensive clothes or a fancy office or an expensive watch or something like this.

I remember early on in my career, somebody saying, "Oh, you should get a real nice watch so it shows nice." And I remember rolling my eyes to myself and thinking, "I've never enjoyed wearing watches and I'm not going to start now. I'm who I am, right? Don't do that." You want to be careful about that and make sure that the advisor you're working with is genuine.

Look, there's nothing wrong with your advisor being financially successful. In fact, that's almost certainly something that you want to see from the person who's giving you financial advice. But you don't want to work with someone who uses that flashiness and style to distract you from the fact that they really don't know what they're doing. I mean, your gut usually has a good understanding of this. Give your own intuition some credit on this matter. Your own intuition is smarter than you think a lot of times.

Ben: All right. We're talking about the different personalities you might find when you sit down and meet with an advisor. If you want to sit down and talk with Ryan, get to know him a little bit better, you can always do so by starting with the website, CravitzFinancial.com, or you can call 714-462-9155.

Well, there's plenty of bad news out there everywhere we look, Ryan. The last thing you really need is an advisor that's always pointing out the bad news that's on the horizon. We're going to call them the Armageddon prophet.

Ryan: This advisor uses scare tactics just to try to influence clients' decisions, and they may overemphasize the risk of not following their advice or create a sense of urgency when it's unnecessary. Symptoms also include constantly predicting gloom and doom, and so you have to watch out for this one certainly as well.

Ben: All right. What about the avoider? What does the avoider typically do?

Ryan: If you ask a lot of questions and all the answers that you get seem to dance around the details and they're not directly answering your questions at all, let this be a warning. It's probably a sign that the advisor feels that you won't like the answers.

Ben: Yeah, the avoider, we want to avoid them for sure. All right. What about the fee first scoundrel, right? Everybody charges some sort of fees, but what about the fee first advisor?

Ryan: Well, some advisors out there don't want to give you any information about their strategy until you've moved your money over to their firm. I mean, it is understandable that someone doesn't want to give away their expertise for free, but you should be confident that if you're embarking on this journey together, working with a new advisor, that they understand your needs, your goals, and you should have a clear understanding about their approach and their philosophy and make sure that it meshes with yours.

And you need to do that before moving forward. You want to make sure that you're getting on the same page, because that's the start of what could very likely be, hopefully, a very long relationship working together. And it's all about communication, and so being honest, being transparent about what's happening from the start and all the way through the process, really.

Ben: Got one more for you here before we close out the show. What about the tortoise? I can imagine a very slow-moving advisor, but what exactly is this?

Ryan: Yeah, so this one sticks to the same strategies year after year, regardless of shifts in the market or the client's life circumstances, which displays a real lack of adaptability and innovative thinking.

Sometimes when I meet with somebody new and they tell me about what's been happening in their financial life and how they've transitioned now into retirement, and we start talking about what the financial strategy is as far as getting income from the portfolio and what the strategy is around when they're going to take social security, if they have a pension that they're entitled to, and all those types of things, and a lot of times what I will find is that there hasn't been any real change, especially when we're talking about the portfolio as far as, "Okay, how are we going to invest now that we're retired, and what is the specific approach that we're going to take to get this income? Which accounts are we going to really withdraw from and why?"

And oftentimes at that point, they are withdrawing money from certain accounts to provide them income in retirement, but it doesn't seem, unfortunately, that oftentimes there's a well thought out process as to why they're withdrawing certain monies from different accounts and when.

You have to have that. Make sure that the advisor that you're working with, if for instance, they're an advisor that specializes in accumulation planning with younger folks, that you recognize that. And if you're not working with somebody that specializes in retirement income planning, that perhaps you have a conversation with somebody that does, such as myself, that can help you navigate the decumulation stage of life or the spending phase of life, which is so important because quite frankly, you only get one chance to do it right. You've got to make sure that you're going in and you're making some good, smart decisions from the start.

Ben: That's great. Well, I had a little fun with this, some great names for all these different personalities, but if you want to learn more about Ryan and Cravitz Financial, just log on to CravitzFinancial.com. You'll get a lot of info right there from the website, learn about what they do and get that process started. But for Ryan, anyone that wants to actually sit down and have that first meeting, what can they expect from just that first introduction?

Ryan: It's super casual. I mean, that's the opportunity for us just to get to know each other. I'm going to have a lot of questions for sure to understand you, your situation, what's important to you, what your goals are, where you are now, what you've done in the past, what's worked, what hasn't worked, all of those things. Certainly, you're going to bring in any necessary paperwork, statements, things like that, that are going to be relevant to our conversation, but it's a real casual type of conversation, that first meeting.

Ben: Very good. Again, you can log on CravitzFinancial.com, get that process started, or give him a call, 714-462-9155.

All right, we'll close out this episode of Candid Conversations: Retirement Talk with Ryan Cravitz. Ryan, enjoy the summer and hope the beach volleyball goes well.

Ryan: Thank you, sir. You as well.