Getting started
In an earlier blog I listed some challenges of improving yourself financially starting with finding a professional to help you. This blog will go into more detail about how to find that special person. Let me say at the outset there are any number of sources for advice on this topic. Google “finding a financial advisor” and you will see what I mean. I picked just one site recently to see what is available to advice seekers. 1,490,000 responses came up! WOW! Can that be helpful? Well yes, maybe.
Next steps
It’s not about the millions of options out there, but rather finding one that works for you. And there could be hundreds if not thousands of advisors who are a great fit for you. I believe in 3s. No more than 3 issues at a time. If you want an advisor to help you with your finances, what are the 3 things most important for you to improve? Living within your means? Saving for retirement? Buying a house? Paying off loans? There are 3 or less if you will focus.
Some might say solving most financial issues can be boiled down to having more money, which means get a great investment advisor. I see the issue differently. An investment advisor can help only if there is surplus money to invest.
That gets us to budgeting, tax reduction, managing debt, not over paying for insurances which are so necessary, and more. Throw in preserving the wealth that you accumulate — estate planning — and you have the varied subjects that I was trained in as a Certified Financial Planner.
More is More
Clearly my view is most financial issues are a blend of several distinct topics. Find an advisor who is multi-disciplined. An investment planner needs to know about more than investment instruments. He should create multiple tax pots and consider the time at which money will be needed for different goals.
Most of my clients have investments in employer 401k plans, their own retirement investment, and non retirement accounts — often more than one. Helping them means understanding, analyzing, advising and coordinating all of those. Comprehensive planners are geared to do this. Most single purpose advisors — investments, insurance, accounting, taxes — are not.
3 Questions
I have a 30 page report on finding the right advisor. I have questionnaires that help you determine your risk tolerance and others that focus on specific situations — The Most Important Questions for a Surviving Spouse — as an example. In keeping with the power of 3 here are the questions you should ask when looking for to hire that special person who can help you the most:
- What training and experience do you have including certifications and why is that important to your clients?
- Describe your typical client — goals, assets, age, income — and allow me to contact one that is most like me.
- What investment and insurance products do you use most, why, and how are you compensated for them?
You will learn about the person — what they do, why they do it, how they do it, and who for. The rest is up to you and your intuition. Do your homework so you can say I know, like and trust my advisor.