…following stocks, balancing their checkbooks and reading the business page of the newspaper. Most likely that is not you. If this is not your idea of fun and relaxation then I highly recommend you work with a financial adviser or financial planner.
I know, Suze Orman believes you can do it yourself by investing in the S&P 500 and making your own trust or will, yet the reality is that many will buy her books and programs, but few follow through.
We procrastinate, worry ourselves to distraction, or simply feel too overwhelmed or inadequate to make a move forward because it’s hard to know what the best step is. We have different needs when working with a financial professional, depending on the complexity of our portfolio/family, our experience level and our personality. So take that into consideration during the next couple of paragraphs.
Years ago, just as I was beginning my career as a financial advisor, my partner and I decided it would be helpful to have someone do a financial plan for us. I wanted to experience being the client, to see how they treated us as a couple and take notes both personally for our marriage, and professionally.
We chose a financial planner I had heard speak at a women’s networking event. I didn’t ask anyone for referrals, or ask her for references, just went on her impressive credentials and the confidence she projected during her talk.
We were given an extensive questionnaire to complete before our first appointment, which was daunting, but we dutifully filled it out and went to the first meeting. We entered an impressive office and were seated in a conference room, and offered tea in fine china. I remember thinking; she must be good, look at this place, impressive! The planner, wearing a conservative navy suit and clunky gold jewelry, came in, shook our hands and immediately launched into a discussion of assets and liabilities. It was all business, and focused mostly on my spouse since she had complex stock options. I barely participated in the conversation, despite several attempts.
I left the meeting feeling in my gut that 1) these were not my people (in values, particularly), 2) it didn’t feel like the planner cared much about me and my contribution to the family and 3) the woman seemed intent on impressing us with her roster of big name clients. Having no prior experience with financial planners to refer to, we ignored our intuition. We wanted to play with the big girls, and assumed our discomfort was from feeling inadequate rather than there not being a good fit.
So, of course we went ahead, spent $1500 on a financial plan and found that in the end we had an impressive binder filled with exciting scenarios of how rich we would become if my partner stayed at the job she hated for another 20 years. We had no action plan, no insight into the future and no better understanding of how to improve our money management process. We never opened the binder after we left that meeting.
Here’s what I learned:
Lesson #1: Values Matter
You will have a better experience with the financial adviser/planner you hire if your basic values line up. You may want someone who is all about building wealth, driving fast expensive cars and jet setting around the world. You may want a Financial adviser that cares about philanthropy and sustainable investing, and walks their talk. You may prefer someone familiar with your religious values and practices, and who invests in alignment with these principals. You can learn a lot about a planner simply by their environment and how you are treated in the process of making appointments and meeting for the first time.
Lesson #2: Listen To Your Gut
When you interview a financial adviser notice how you feel. Are you energized? Anxious? Excited to get started? Do you feel listened to or talked at? Does the office comfort you, is it soothing or is it somehow grating or nauseating? Aesthetics matter as do personalities. Pay attention to all of the things that indicate who this Financial adviser is and what matters to them.
Lesson #3: Ask For What You Want
My most successful clients are those that come with questions in hand. They understand that I don’t expect them to understand everything, and they see me as a resource, a mentor as well as their financial. Tell the Financial adviser what you are looking for when you first meet them, and see how they respond. Do you need monthly check in calls? Do you want them to clearly articulate their fees and commissions? Do you want them to coach you through the process of starting a business and setting up the finances correctly? If you don’t know what you need, or even what the possibilities are, ask them to share some examples of how they work with their clients.
Lesson #4: Do They Speak Your Language?
This is so important when it comes to money. You want to choose an adviser that communicates in a way that you understand. For me that means they need to use story, metaphor and lots of silly pictures, and for others it may be charts, graphs and pages of numbers. Some advisers are gifted communicators and others should have been financial analysts working at a computer all day. Look for a professional that is skilled at relationship building as well as financial planning, because you need to feel safe talking with this person about what is difficult about money, and if someone important in your life becomes ill or dies, you need to feel comfortable sharing that with your planner as well.
Questions to ask when interviewing a financial planner/adviser:
- Describe your approach to financial planning.
- How are you paid?
- Tell me about your experience.
- What is your investment philosophy?
- What are your areas of expertise? (be wary of someone that says ‘everything’)
- What kind of client do you love to work with?
- Can you please give me 2-3 references? (Call them! Ask what they like about working with this planner, what challenges they’ve had, etc.)
Questions to ask yourself after talking with a potential planner/adviser:
- How do I feel? What is my gut sense about this person?
- Did they want to get to know me, and did they listen?
- Do I feel safe with this person? Could I ask any question even if it feels stupid?
- Did they answer my questions clearly and check for my understanding?
- Did they feel open and engaging, willing to educate me or did it seem like they were pushing a product?
For more information click here http://www.sec.gov/investor/pubs/invadvisers.htm
© 2011 Luna Jaffe