A good investment advisor is as important as a good doctor, but do you know how to choose the first one? – 10/27/2023 – From Grain to Grain

Today, I received an email from a reader who made me reflect on a problem that many face, but whose solution is simple. The reader had a dilemma and asked me for help to decide.

After yesterday’s article, she asked the bank manager and her private pension advisor for recommendations and received two suggestions. She thought the difficulty was in choosing between products, but I pointed out that her real problem was something else.

In the text, she asked for my help, as she said that the reason for her indecision was that she didn’t even trust an advisor, much less the bank manager.

The fact that the recommendation for each professional is different is nothing new. After all, each institution and professional can have a view on the economic scenario and indicate the product they believe to be the most appropriate. As I mentioned, this was not the problem.

This reader’s biggest problem, as well as many other investors, is seeking help from a professional they don’t trust. This attitude does not seem reasonable to me.

I’ll make an analogy.

The doctor is the professional responsible for guiding and caring for your physical health. Given the importance of having good health, we take great care in choosing the most qualified professional.

Reflect: What would be the point of going to a doctor you don’t trust? Does it make sense to pay this professional and waste time listening to his recommendations if you don’t trust what he says?

Financial health is also very important, as it also has consequences for physical health. However, most do not take the same care when choosing the professional who takes care of their financial health.

Therefore, just as you usually have criteria for choosing your doctor, you should also have criteria for selecting the financial professional who helps you.

The selection criteria for both are not very different, as for any other professional, for example:
– Recommendation from friends, relatives and acquaintances;
– References and recognition in printed and online media;
– Professional and academic experience.

You rarely select a doctor just because you fell in love with him. However, most of the time, individuals fall in with a manager or an advisor and follow them, listening to instructions and not trusting them. It’s a waste of time for both.

You can hardly choose your manager, as he is appointed by the bank. However, you can choose an investment advisor that is most appropriate for you and that you trust.

So, if you have fallen out with an advisor and you don’t trust him, act in the same way as you would if you had to see a doctor urgently.

Look for references, talk to friends, consult recognized and experienced professionals, decide your criteria and find a professional you can trust.

This professional will probably be more qualified and provide better investment recommendations. At the same time, the mutual trust and long-term relationship you will build will provide greater longevity to your financial assets, just as a trusted doctor would do to your physical health.

Michael Viriato is an investment advisor and founding partner of Investor’s House.

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