Finding the Best Financial Advisor in Fairfield County

How do you go about selecting a financial advisor to either periodically help you oversee your investments or manage them directly?

 In Fairfield County you are certainly not without plenty of choices as we are close to the mecca of the hedge fund universe. I’m not a fan of hedge funds as by and large they are overpriced underperformers that can frequently carry exorbitant opaque risk.

Need I go on?

Therein lies my first recommendation for finding the best financial advisor in Fairfield County: avoid all that are pitching hedge funds. I have two daughters in high school who are no strangers to social media so I am somewhat vicariously privy to the behavior of the “cool” crowd. I would argue that hedge fund investing is the “cool kid” in this part of the investing world. Beware! Sometimes the cool kid turns out just fine but when it comes to my daughters, I tell them to try not to peak in the 11th or 12th grades because life is just getting started.

Now that hedge funds are out, let’s get back to finding the best financial advisor in Fairfield County, CT.  I’m assuming you recognize the importance of managing your life savings wisely so let’s figure out how to go about this. I would start with some phone calls. You can probably pretty easily get a list of potential advisors from friends, family, and co-workers for starters. To cull through this potentially long list, as efficiently as possible, I would ask just one question:

“What special skills do you possess, and what access do you have to world class resources that will enable you to manage my money in a way that my portfolio’s returns should on average comfortably exceed the returns of the market?”  

If the answer you get is anything other than “I don’t,” or something very similar, I would politely end the conversation as fast as possible and move on. As much as people would like to believe their advisors possess these skills, and that advisors would like you to believe they have them, they don’t!

Okay, now that we’ve ruled out any advisor that has anything to do with hedge funds and all advisors that claim to possess superior skills in generating market beating returns, what’s left?

To find the best  advisor in Fairfield County you need to find someone who spends a good deal of time explaining how much they don’t know as well as what they do know.

Here are the financial advisor skills to look for:

• Ability to explain clearly and understandably why investing in the stock market is not equivalent to heading off to the local casinos to wager at your favorite machine or table game.
• Believing that significant value can be added without having a crystal ball.
• Ability to manage human behavior!!
• Maintain appropriate asset allocation
• Manage taxes
• Control costs
• Someone who encourages the tough questions. I tell my clients “the tougher the better” because nothing should be held back when it comes to understanding what’s happening with your life savings. I may not know the answer right away but I’ll do my best to get it as fast as I can.
• Someone who understands very clearly that positive short-term investment performance does not equate to genius nor negative to idiocy. This is just the market doing what it’s going to do whether we like it or not. If you remember only this last point, you’ll still be way ahead of most.

Lastly, a quick definition of the term “best,” not necessarily so much as it pertains to an advisor but rather to investment performance. The truly best performers over most any given time period will very likely have enjoyed the benefits of a significant luck component that is unlikely to consistently repeat. Relying on luck is not a plan. A great Fairfield County financial advisor will know the difference between luck and skill and will always be intellectually honest enough to make sure you know too.

Luck is fickle, skill not so much!! Good “skill” all!