Tips To Finding a Fit Financial Helper

This post is part of the Money Life Network’s latest buzz “Jumpstart Your Economy:  Tips For Starting Your New Year Off Right

It is a common held belief that everyone out there trying to help you make money is just trying to take your money. I think that it is true to a degree, I’m not saying there aren’t slimy people out there just looking to take your hard earned cash, but there are ways to minimize the chance that you’re going to run into such a person. Heed these warnings…

There Is Such Thing As Good Help

So before we go too far and get a slew of financial planners on here ripping us a new one, let me first state that there ARE good financial planners out there. However, I’d like the NON-financial planners out there to know that you need no certifications of any kind to put “financial planner” as your profession. A CERTIFIED financial planner has some tests to take that can distinguish them from the standard guy hacking it to become one.

Additionally, CNNMoney had a good Q&A about it last year that featured a good few lines: “Question: I am a financial adviser, and I feel it’s easy for you to be critical of our practices when you are at your desk and not in the field trying to help actual human beings. Can’t you find just one testimonial or write one article reflecting a scenario (and there are a lot of them, believe it or not) in which an adviser has helped a person achieve their financial goals?

The Mole’s Answer: Actually, I happen to be a practicing financial planner and am trying to help human beings every day. That’s what distinguishes me from other financial columnists.

Still, I think your point is well taken. I do know many good financial advisers who help their clients achieve their financial goals. I’ll get to why I don’t write about them in a moment. But first, I’d like to address your point on what a good adviser can do for clients.

Good advisers know how to take a step back and look at a client’s overall financial situation and let them know whether they are on track to meet their goals. They can then look at several areas of the financial plan and make recommendations on changes to increase the likelihood of reaching those goals.

So take the above into consideration with the below that may start to sound like it’s a pit of despair that you can’t get out of, because it’s not, and you can.

Utilize Your Free Options

It costs you nothing to hit up a handful of your closest financial advisers in the area to give you an initial consultation. They want to “earn” your business by giving you good advice to start off your relationship. However, I’ve found that this can be more of a crap shoot depending on how the market is at the time.

Shop around, they’ve all got things to tell you to woo you their way. Maybe you’ll make a connection above and beyond just the money that leads you to trust them. Not all of them are dry old bums that just have the job to have a job. There are good people in the industry that are really looking to help, you just need to do some digging to find them.

These People Aren’t Magical Wizards

Let’s be honest, you’re not reading this blog because of the stunning satire; you’re reading it because you like to keep abreast of what’s cooking in the financial waters. You want to know how to turn a buck in a sour economy and aren’t sure where to put your money to give it the best bang for its buck, right? Additionally, you assume that since these financial advisers live and breathe investing, that they know all the answers, right?

I’ve got news for you, they’ve got all the fanciest charts in the world, but when it comes down to it, a financial adviser has a job because you give them a job. If they were all-knowing with money, do you really think they’d have time to help you out while they’re counting their millions?

Or how about how the stock market has had thousands of people claim to have the “magic stock picking robot” or “fool proof investing strategy” – they’re ADVERTISING for you to buy from them. If they really had the magic pill that you could take and transform their finances, would they really need to advertise it?

It’s a business, and you’re the one that is keeping it going. There’s nothing wrong with it. These are big decisions not to be taken lightly. All I’m saying is that you’re not taking on a Herculean task in investigating on your own, it can be done.

Ask Questions – Lots Of Them

David Bach has the quintessential bit I believe of “get a referral”. Your friends know who they like, and you like your friends, right? “This is such a cliche, but it’s a cliche because it’s true. It doesn’t make sense to start your search for a financial adviser from scratch. Most likely, you already know someone who has a great financial adviser. You just need to ask.

But whom do you ask and what do you ask them? A logical place to start is with your accountant or attorney. Both should be able to offer you more than one referral. (In fact, I suggest asking for three referrals).

Another great way to get a referral is to ask the wealthiest person you know, “Who do you use as a financial adviser?” It doesn’t have to be a close friend. Ask someone you respect — your boss, or a friend of a friend. The wealthier they are the better, because the rich tend to have the best advisors.”

CNNMoney again helps out in pointing out a few good ones including: “1. What was your largest mistake over the past 10 years?

Be wary of self-serving or trivial examples, such as “I’m too dedicated to my clients.” I’d rather hear my adviser say that she used to underweight international stocks or even tried to time the market and failed. The key is that she’s willing to admit to real errors and can tell you what she learned from them. After all, nobody’s perfect. If Warren Buffett can own up to past mistakes, so can your adviser.

2. Do your financial incentives always line up with my best interests?

Knowing what you’ll pay for a planner’s services isn’t enough. All payment models – yes, even hourly fees – create inherent conflicts between advisers and clients, and your adviser should be up front about that too. For example, a planner who charges based on a percentage of assets should let you know that he has an economic incentive to capture all of the money you have to invest.

3. How have your clients’ portfolios performed over the past 10 years?

Your adviser will likely tell you she outperformed the market, and she may even be willing to provide performance data as proof. But that only tells you she’s trying to time the markets, which will add to your fees and lower returns over the long haul. A much better answer: Your adviser’s explanation of how she provided focus and discipline to allow clients to earn market returns.

4. If I wanted to buy a couple of broad index funds or ETFs, which would you recommend?

This is a particularly important question, as it will give you a glimpse into the adviser’s priorities and show where your interests fit in. An expensive index fund has no chance of outperforming the lower-cost equivalent index fund. So if he suggests an S&P 500 or total index fund that has an expense ratio of 0.5% or more, you know your interests aren’t coming first.”

I personally like the last one because it relates to the point above of shopping around first. If you poll 5 or 6 different people from different firms and they all recommend the same few funds, you’ve got a pretty good idea that they may be good.

From what I’ve seen in the past is that your Edward Jones, Merrill Lynch, Ameriprise, or whoever are going to toss you the funds that fall under their management 95% of the time right off the bat if you go in there saying you’re not sure what you’re looking for.

They do that because that is their biggest payday kickback. They are getting a commission from you buying their funds. The big boss up the chain is happy to kick a bit of your cash to the little guy for signing you up for their stock, who wouldn’t?

Treat The Search Like You’re Buying A New Car

You’re making a decision that you’re likely going to be in for a while. The thing is, we put more effort and time into buying a car than we do to planning our retirements. Take that same approach when finding a planner.

“Most of us definitely consider brand reputation when we decide to buy a car. Some of us will buy the tried and true makes that our parents bought, while other people will take a risk with a newly-introduced car company.

Similarly, you may want to look for a financial adviser who has a longer track record, or you may decide to take a chance with a new graduate who is building the foundations of his or her reputation.

Typically, the financial advisers who have been around for a long time with a good track record will cost more than the new graduates with little experience. That’s not to say that the new graduates can’t make you profits or help you save money, but they do pose more uncertainty.”


Life really does come at you fast. Before you know it you’re at retirement age with no retirement money to show for it. It’s not rocket science to figure out what everyone else is doing. You’re reading a personal finance blog at this very moment. In just doing this you’re ahead of 90% of the people out there.

It just takes practice like everything else – know what you’re getting into and know how to squeeze the most out of what you are able to keep. If you’ve gotta ask a few questions along the way, be prepared. If they can’t answer what you’re tossing out, they’re likely not going to be able to help you.

It’s not impossible, but you do have to stay on your toes to keep them on their toes!
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Filed Under: advicefinancial education