Hiring a financial planner is a personal and important decision. This is someone who will be perusing the intimate details of your financial life and could potentially hold your future retirement success in their hands. Most experts agree that anyone would benefit from working with a financial planner, no matter their level of income. However not all financial planners will be a good fit for you.
Before I became a financial planner myself, I was on the other side of the desk and hired, and ultimately fired, a few planners before finding one I was comfortable with. Had I been clearer on what I was looking for and knew what questions to ask, I could have avoided the situations in which found myself working with someone who’s approach I wasn’t comfortable with.
The first planner I worked with was not really a planner at all, but with a salesperson eager to sell me “retirement and insurance products”. I wasn’t interested in being sold; I was a young working professional with a family and wanted a broad-based plan to identify strengths and weaknesses across a number of financial aspects and someone I could trust to give me advice.
On my second attempt to find a planner, I found someone who was willing to build a plan for me, but only if I invested a minimum amount with them and be charged a percentage of my account balance every quarter. The plan I received was light in every financial aspect other than investments. In time, I realized I was working with a wealth manager rather than a financial planner.
Ultimately, I found a fiduciary fee-only planner that worked well for me. My blueprint was built and progress was tracked. I found myself working with someone who imparted their knowledge and experience in assisting me on my financial journey. Truly my trusted planner and advisor. And that is what I aim to be with all of my clients.
Based on my experience, I would suggest that before you start working with a financial planner, or if you are considering a change of planner, it's a good idea to ask them these four questions:
1. Do you have experience working with others in my life situation?
Your financial planner isn't there to judge you. Their job is to help you make the best of any financial situation. This could mean helping you determine how to fund your child's education, understanding the implications of being recently divorced, the impact of a sudden change (up or down) in compensation, figuring out when you can retire, or if your current lifestyle is sustainable through retirement. Finding a financial professional that has experience working with other clients similar to you, with a comparable attitude towards risk and similar needs, is a good first step.
2. What is your professional background, how did you make your money, and how is it invested?
The best option is to learn from an individual who has already proven themselves professionally, earned their money and have been successful in building wealth. Know how they handle their own money before they decide to test out their theories on your retirement account. Far from being rude, your financial planner is likely to expect this question and probably has an answer ready to share. Hearing their background and strategy may help you determine whether or not they would be a good fit for your long-term goals.
3. Are you willing to sign a binding fiduciary agreement?
A fiduciary agreement, also known as being held to a fiduciary standard, means that your financial planning professional is required to place your interests above their own -- even when it means they make less money. As unusual as it may sound, not all financial professionals can attest to working in your best interest. Get it in writing.
4. How are you compensated for helping me?
Financial planners are often making money from a variety of sources: product sale commissions, back-end fees, front-end fees, 12b-1 fees, percentage of asset fees, performance fees, fees for trades, or direct hourly or flat-fee payments from clients. Some fees are hidden and reduce your returns and others are in plain sight. It's important to get full disclosure in writing and know and understand exactly how your advisor is compensated before you make a final decision!
Most people find working with a financial planner to shed light on many financial factors they had not considered. You may learn more about financial principles and ways to improve the well-being of your family – or simply get a plan in place that brings clarity to your financial life and leaves you feeling more comfortable and in control of your future.
Fialkow Financial Planning
Fialkow Financial Planning is located in West Palm Beach, Florida and accepts clients nationwide. I provide high quality financial advice to people from all walks of life and income levels without the need to sell products, take assets under management for a fee, or require minimum asset or net worth levels. I proudly embrace my fiduciary responsibility.
Investment advisor representative of and investment advisory services offered through Garrett Investment Advisors, LLC., a fee-only, SEC-registered investment advisor. Tel: (910)-FEE-ONLY. Fialkow Financial Planning may offer investment advisory services in the States of Florida and Texas and in other jurisdictions where exempted.
This communication has been provided to you for informational purposes only. Although information in this presentation has been obtained from and is based upon sources that Garrett Investment Advisors, LLC believes to be reliable, Garrett Investment Advisors, LLC does not guarantee its accuracy and it may be incomplete or condensed. This information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.