We are often questioned on what makes a good...great financial advisor? The answer to this is quite nuanced. First and foremost is someone that you can talk to…that your gut says, “ok I can have a conversation with this person”. Of course, as Karen Carpenter (RIP) once sung... ”We’ve only just begun”, means being able to talk to someone, goes without saying, is an integral part of financial planning...but it's only the beginning. So, what should you look for...dare we say require of someone, who is going to be providing financial advice?
We came across a recent article titled 6 Questions You Should Be Asking When Hiring a New Financial Planner. It was filled with your typical well-meaning questions: How long have you been in business... what are your credentials ...niche ...compensation ... and so on. Blah, blah, blah... But... does it really get to the heart of the matter? A dollar sheltered from taxes at the highest rate is a risk-free savings of over 35%, a financial plan that does not include your tax return is “Fugazi”. Advice that does not have a clear, easily identifiable price or cost is usually one that has no cost...which begs the issue what is the advice worth and more importantly why is a financial planner not charging for the financial plan/advice she prepares/provides...and how does she pay her bills? How much does the advice cost? and who is this check truly being written out to? This is what needs to be first and foremost. Any discussion or presentation of ideas, actions, and so forth made by someone who does not have your most recent taxes, is at the very best dancing in the dark. At worst not potentially saving you at the highest tax rate Fed and CT --> WMGNA’s HQ is over 40%, without investment risk and often without any out-of-pocket cost!! I like a 40% tax savings without any investment risk or out of pocket cost.
Now of course there are many folks who can help you invest your money, save for college, retirement, sell you insurance that you might need etc... And that stuff is important. They may even have a sales process that includes some thoughtful planning and even be making you a lot of money. This is all cursory to actual financial planning. We don’t begrudge anyone for making an honest living!
So, the 6 questions , 8 questions, whatever set number of questions you think you must ask; it essentially boils down to two questions which are “What am I getting and what does it cost? " as well as “What does this save me on taxes?”. Once those are clearly answered then its smooth sailing to the more mundane questions. As always, your concerns are our concerns!
Talk soon. Keep The Faith.