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  • Writer's pictureAkshay Nayak

The Ideal Advisor

More and more people today are moving away from managing their finances on their own in favour of working on their finances with a trusted advisor. The advisor could take the form of a trusted family member, experienced peer or most of the time, it could be a professionally qualified financial advisor. While working with qualified financial advisors definitely shifts the majority of the responsibility off our shoulders, it definitely requires us to do a lot of groundwork in terms of actually choosing the right kind of advisor to work with. And while professional qualifications and degrees are undoubtedly important, choosing an advisor with the right attributes and personality traits is the key to any lasting advisory engagement. Therefore, in today’s post I’m going to talk about the ideal attributes and personality traits to look for in financial advisors when we would like to establish an advisory relationship with them.


The core element of any advisory engagement between clients and advisors is the ability of clients to be open and transparent with their advisors without hesitation. This is possible only when there is a strong interpersonal relationship between the two parties. Therefore we must choose to work with advisors who we can relate to and establish a mutual rapport and comfort level with. Of course, establishing a comfort level would take time and is a mutual responsibility of both parties involved. So it is important for advisors to be transparent and clients to be respectful during every conversation between them. This would automatically facilitate greater transparency and comfort between both parties. As a result, advisors would be able to communicate and be understood much more effectively. This only ends up creating a better advisory experience for clients.


Advisors must be judged based on the process they follow rather than the returns they deliver. Therefore, the next parameter on which to assess a potential advisor is to look at the approach they follow when imparting advice or creating financial plans rather than the kind of returns they deliver. It is always essential for prospective clients to look for an advisor who follows a risk centric approach rather than a return centric one. Advisors who clearly communicate their approach to imparting advice and creating financial plans are the ones who offer the most value to prospective clients. Doing so reduces scope for clients to question the suggestions given to them by the advisor, because they would clearly know how each suggestion is conceptualised. This would allow clients to place implicit faith in their advisors over time. One of the most important jobs for any advisor is to be able to manage client behaviour and ensure that they avoid making irreversible financial errors. Therefore, advisors need to be able to make clients aware of all the options available to clients in a particular situation, along with the risks that come with each of them. They must also put effective measures in place to deal with the risks that come with the course of action that is ultimately chosen in consultation with clients. This is because returns generated by clients on their portfolios and the comfort with which they achieve their financial goals would be a function of effective recognition and management of those risks.


As clients, we must look to work with advisors who operate in a fiduciary capacity during an advisory engagement. This means that our advisors must always work keeping our best interests in mind at all times. Therefore, an advisor worth working with would be someone who plays the role of an educator rather than that of a salesperson when working with clients. This means that advisors must not look to blindly push every product possible to clients. Advisors must instead be able to educate clients on each product which is a viable option for them in light of their specific financial needs and goals. Our advisors would ultimately be working with our money.

So it is perfectly plausible for us as clients to expect to be educated by our advisors as to what our advisors are doing with our money, and why they are doing it. Educating clients would involve giving clients insights on why a particular investment product is being recommended to them, how each investment product works, the inherent risks and tax implications that come with each product, the kind of returns that can be realistically expected from each product and asset class that is recommended to them and how each product would tie into their financial plans. And if advisors don't do that it would only be highly detrimental for clients. In fact, if at any point of time during our engagement our advisors seem too desperate to just push a product to us without caring to give us the relevant education first, it is a clear sign that there is something wrong and that we should immediately terminate the engagement. This is because investment advice adds the most value to clients when every viable option is presented and comprehensively explained to them, while allowing them to make a choice based on their own sense of judgement.


With the recent shift in focus within the advisory space towards a greater emphasis on comprehensive financial planning, the competency of our advisors with respect to being able to conceptualise and create holistic financial plans also matters. Our advisors don't need to guarantee better returns or smooth achievement of our financial goals. Instead, they must be able to convincingly give us their honest assessment of our financial situations and an assessment of where our finances currently stand. Then they must be able to outline how they will help us achieve our financial goals. They must also be honest enough to let us know when our goals seem unrealistic and help us define them better.

In other words, they must be competent enough to understand our needs and goals and design a clear strategy to direct us there. And as long as the strategy that is recommended to us helps us come close enough to achieving our goals, a little behavioural discipline and emotional stability on our part will definitely see to it that we successfully complete the journey over a period of time.


Choosing the right advisor to work with is the first step towards fostering a lasting and fulfilling advisory engagement and ensuring a rewarding advisory experience for clients. It is therefore important for us to get this step right before looking into other aspects. A competent, friendly and transparent professional who works in our best interests with a willingness to educate and a clear process with regard to the way they impart advice and create financial plans is what we must look for in a potential advisor. Because what really matters in the end is not the kind of returns we generate on our portfolios every year or how quickly we make them. What we really need is a trusted voice of guidance and reassurance that helps us maintain our emotional stability and behavioural discipline throughout our journeys to financial independence. This gives us a lot more control with regard to what we are doing with our money, how we are doing it and when we are doing it, which is key to effective money management and financial planning. Once these aspects are in place, returns are just a natural byproduct. All of this would go a long way to ensuring that we as clients derive the most value for our money's worth from our advisory engagements. And that in turn means that our chances of achieving our financial goals and financial independence are significantly increased, which is what all of us look for when we begin our respective journeys when working with professional advisors.

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