If you have been working with an advisor for some time, you have probably become used to the high fees and conflicts of interest without even realizing it.

In this post, I’m going to talk about bad advisor behavior to watch out for.

1 – High Fees

If your current advisor is charging based on a percentage of your assets of 1% or more, you are being charged what I like to call Ridiculously Silly Fees.

Your advisor doesn’t want you to know that he or she doesn’t spend any more time rebalancing your $2 million account than he or she does rebalancing another client’s $500k account.

In the first case, at 1% of AUM, that’s over $20,000 per year in fees to your advisor!  Great for your advisor but not so good for you!

Check out your most recent statement and take a look at what you are paying.   If the fees are taken directly out of your accounts, they might be harder to see, but believe me, they’re in there.

If your advisor won’t give you a straight answer or tries to confuse you, that’s a big red flag.   You deserve to know what you are paying.

2 – Market Timing

When you look at your statements at tax time do you see a blizzard of transactions that took place in the last year?

Are you scratching your head and wondering why?

That’s most likely because there really wasn’t a disciplined investment strategy.  Your advisor was probably just trading by the seat of his fancy pants and reacting to market volatility throughout the year.

Research from Vanguard has shown that staying the course is the best strategy during times of volatility.  Vanguard founder John Bogle has said that he has never met an investor that can consistently time the market.   I’m going to bet that your current advisor can’t either.

3 – Steering Your Portfolio to Active Funds

Does your portfolio contain an excessive number of funds, all actively managed?   Because of their high fees, it is unlikely that this type of portfolio will do better than a similar portfolio of index funds over the long run.

While there is the possibility of outperforming an index using active funds, this is not the same as the probability of it happening.

The problem is that we can only identify the active funds that outperformed after the fact.

Your advisor may just be tempted to recommend funds that produce the largest commission.

4 – No Real Financial Planning

If the extent of your current financial plan is picking investments for your portfolio, and recommending insurance that your advisor will sell you, then your advisor is not doing real financial planning.

A real financial plan will map out your future and provide a roadmap to your retirement and savings goals.

[More on this Topic: Why You Need Real Financial Planning]

5 – The Advisor’s Technology is Not Up to Date

Is your advisor’s website dated and stale with no actual useful content?  Is the client portal difficult to use?

Are you still required to come into the office for meetings instead of being offered more convenient virtual meetings using screen sharing technology?

If the answer to these questions is Yes, your advisor is behind the times and is not investing in technology.  With the advent of modern cloud technology, any technology savvy advisor can provide these services to his or her clients.

6 – Your Advisor Doesn’t Return Your Calls

Does your financial advisor promptly return your calls and emails within 24 – 48 hours?

Does your advisor always seem to be out on vacation or on the golf course when you call?  Are you always talking to the receptionist or junior staff members?

If so, your advisor might not think that you’re very important anymore.

7 – No Succession Plan

Do you talk to a different person every time you call your advisor’s office?  Is there a revolving door of staff members?

This probably means that your advisor does not have a succession plan in place with experienced people that can service your accounts.  Most likely there is no coherent plan for developing talent, and assistant advisors and staff members are leaving for much better opportunities elsewhere.

8 – Not Acting in Your Best Interest

Unless your advisor is acting as a fiduciary, he or she is not acting in your best interest.   There are a lot of silly things that your advisor can do for the sole reason of increasing the fees you ultimately pay.

[Check Out: Case Study: Too Many Funds]

Working with a competent advisor can be a great experience.   To see what that’s like, contact me here.