Finding the right financial advisor for you

By Trista Crossley

wheat field

Undoubtedly, most farmers would prefer to focus solely on the physical aspect of being a farmer, but unfortunately, there’s a whole other side to the occupation that needs regular attention. Bookkeeping, taxes, and legal planning are a big part of a successful operation, and many farmers have a team of professionals to help them. A financial advisor can be a valuable part of that team, but finding one who fits you and your investment style is critical. 

Jordan Thayer, a financial advisor with Morgan Stanley, has some suggestions about when a farmer might consider adding a financial advisor to their team, and what to look for when selecting one. 

What are a financial advisor’s responsibilities, and when would a farmer need one?

A financial advisor’s primary responsibilities are to help you determine and prioritize your financial goals, craft a portfolio that will move you further along in a financial plan, and keep you updated on a regular basis. Furthermore, a financial advisor should be prepared to make recommendations or provide feedback when you are facing significant financial decisions in your life, such as:

  • How do I plan the buy-out of my farm business?
  • I received an inheritance, what should I do with it?
  • Should I purchase more land, more equipment, or diversify my investments into something else?
  • How can I structure my estate to help ensure as much of it passes to my kids and grandkids as possible?

Financial advisors can’t give legal or tax advice, but they can connect with your legal and tax professionals and integrate their experience into recommendations about what the most financially efficient course of action is, based off your desired outcome. Financial advisors become especially helpful during big life events, like getting married or divorced, having a baby, buying a house or land, taking care of aging parents, or selling a business. 

What kind of questions should a client be asking themselves when considering a financial advisor?

Do I want or need a traditional, in-person advisor? Am I willing to use an online advisor or robo-advisor and possibly pay less in fees?

What should a prospective client be looking for in a financial advisor?

Ideally, someone who always puts your interests first. I emphasize to many farmers who are looking for a financial professional that this is someone you will be talking to about your money and your family’s future, so you should enjoy conversations with this person! You should be able to have candid, enjoyable conversations with them and not walk away from every interaction exhausted or dread upcoming meetings. When I go to my physician, we catch up on each other’s families, hobbies, and many other subjects, albeit briefly. I can tell he cares and is interested in my well-being. That is why I keep returning to him as my practitioner. I trust him. Your financial advisor should rank in similar esteem with you and your loved ones.

What kind of questions should a client be asking a prospective advisor?

Ask them about their experience. How do they get paid? What are the total fees? What is their investment philosophy? Have they worked with people who do what you do or who are in similar circumstances?

What is the client’s responsibility in the relationship, and what kind of information should they expect to provide?

The client should be honest and clear about what they want and their expectations. Just as in any employer/employee relationship, you need to clearly communicate your expectations so your employee knows how to meet your standards. Additionally, the client really should read their statements. I have worked with clients who tell me they don’t read the statements, and one of the first things I do is open a statement with them and walk them through it and explain what each item means. They may not look at every detail, but every effort at transparency should be made. 

Assuming a foundation of trust has been built, the client should be prepared to share detailed information about their finances with the advisor. A mechanic can’t diagnose an issue on a tractor if they don’t pop the hood and get a look at things. A basic summary of annual income, debts that are being paid off, and a list of assets that make up someone’s net worth are very common to review when beginning the financial planning process. Depending on the specific questions of the client, reviews of business assets, cash flow, wills, estate planning documents, tax returns, and other relevant information may be requested. 

What are some of the mistakes you see people make with regard to financial advisors?

Many small mistakes or personality mismatches can be avoided by thinking about what you want from the relationship. A little bit of preparation when interviewing financial advisors can avoid many pitfalls throughout your search and help make it far more efficient. Have a few questions prepared and written down in advance. Having an idea of what you want, what services you would get value from, and communicating that clearly is a great way to establish if the financial advisor you’re interviewing will be a good fit. For example: 

  • “I appreciate simple explanations — I don’t like it when too many financial terms are used in conversation because it confuses me.” This is a reasonable request! That advisor should remember to speak in terms that you understand and feel comfortable with. 
  • “I would like to know all of the fees that I could be charged.” Also a very reasonable request! If it were me, anyone I would care to do business with should feel comfortable disclosing what they charge, and when they charge it. 
  • Lastly, if you have an investment philosophy that you adhere to, be very up front about it. “I prefer to invest in U.S.-headquartered companies,” or “I prefer to not own any tobacco companies” are several examples I’ve encountered. You should determine if the financial advisor is able to accommodate your risk tolerance and investment preferences.

When I was a company commander in the Marine Corps, there was always the concept of “commander’s intent,” meaning at the end of the mission, I want this specific outcome. My Marines knew that no matter what difficulties they had to work through, they were working toward a very specific outcome that I had made the effort to communicate to them. If a farmer has an idea of their own “commander’s intent,” it creates a very clear direction, both for themselves and the advisor helping them. 

Other “best practices” farmers should employ.

Trust your gut. You’ve built a wonderful life for you and your family with the help of your finely tuned intuition. It has been calibrated from your years of life experience. If you’ve asked your questions and yet you feel like the match isn’t right, then feel free to interview another advisor. Again, this is someone you should enjoy talking to or at least not dread talking to as you seek to optimize your finances.

Jordan Thayer is a financial advisor with the Global Wealth Management Division of Morgan Stanley in Seattle, Wash. The information contained in this article is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be appropriate for all investors as the appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives. CRC6318074 2/24