It seems to me that people too often take the path of least resistance in finding a financial advisor. And that’s probably at least partially the industry’s fault.
The lines have blurred between agents and brokers and planners and advisers, with all kinds of letters behind our names that mean something to us, but likely not much to the people who need our help.
So you might have ended up with the guy you saw all the time at your local bank branch, and he seemed nice.
Or maybe you settled down with somebody your best friend set you up with.
Or it could be that you hit it off with the woman who handed you her number at the last networking event you attended.
And there’s absolutely nothing wrong with that — as long as you looked around a bit and didn’t just settle for the first person who asked.
People will Google a potential suitor before going out on a first date, or even ask a private investigator to do a background search. But when it comes to hiring someone to manage their money, it appears they tend to say yes without doing much research. And, sadly, that means they may not be finding financial advisors who match their needs.
Before you start your search for “the one,” why not take a look at the different types of financial advisors out there?
A financial planner does just what the name implies: He prepares financial plans for clients. That plan may cover cash-flow management, retirement, investments, financial-risk management, insurance, taxes, holiday savings, your estate and more, depending on your needs. You set the goal, and this professional creates the plan to get you there. Some advisers offer similar services, then implement the plan as well. Typically, a financial planner is paid a fee for the plan he builds, and then someone else takes it from there.
Every person out there is looking for something different when it comes to financial services, so your ideal “Mr. or Ms. Right” won’t necessarily be the same as for your neighbors, your friends or your co-workers. Think about what your needs are, and do your homework: Check on licensing, any credentials listed and the person’s experience before you have your first meeting.
And do a little “dating” before you settle down. Find a relationship that’s comfortable — one with good communication and in which you feel confident.
After that first get-together, if you get into your car with more questions than answers, or you feel the presentation was all style and no substance, move on. Remember: You’re putting your financial future in this person’s hands. Be patient, and be picky.