Book Appointment

S2E9 - What Type of Advisor Should I Hire?

Season #2

Q:  What type of advisor should I hire?

A: The answer is, is the advisor who can help you, The advisor that you connect with..coming from the marketing side of this business, I have dealt with the full spectrum of advisors out there, from people who were completely unlicensed and were real estate investors, and other types of people who help people out of financial situations that just they weren't financial planners. They didn't have designations, they weren't licensed, but they did a job that was better. Or as good as most financial planners.

I've dealt with and I've experienced all of them, and I will tell you this right off the bat, and I tell this to everyone who I work with, each model has its own pros and cons and its own lens that they look through the world. But that doesn't mean that any one of them can't help you?

You could have a financial coach who is incapable of managing your investments but will guide you and steer you better than a person who can do sophisticated investments.

The real question you gotta ask yourself is:

Can this person help me? Do I connect with them? is there a basis for me to assume that they are going to be able to produce the results that I want?

Q: Should you only work with a Fiduciary advisor?

A: I don't think it's a fair statement. Let's talk about what a Fiduciary is, and let you jude for yourself.

The term fiduciary is hundreds of years old. It's probably thousands of years old. It is not something new to financial services, and it doesn't define a single type of financial advisor. And in fact, if you ask a lawyer, if you ask an insurance agent, and you ask a stock broker, are you a fiduciary? They all will feel or say that they're a fiduciary.

The question is, is really what capacity are they acting as a fiduciary?

In what instances are they acting as a salesperson in what they are asking? Or are they acting just as your friend? Or a planner?

And the truth is, is that very few of them know where that line is.

Their compliance department might tell them where the line is, but they may not know.

At the end of the day, I, I think I can count on one hand the number of advisors who have met, and I have met, you know, hundreds of advisors, gotten to know them really, really well. I can count on one hand the number of truly malicious advisors. The vast majority of advisors really have their client's best interests in mind.

Now, whether they're capable of delivering on that value, on that desire to help people, that's a separate question. But they all wanted the best for their clients.

So, the term fiduciary means I'm going to treat your money like mine, and I have a legal responsibility to do that. Obviously, there's gonna be limits on where that responsibility begins and ends, and that's a real question, but, at this point, the word "fiduciary" is more of a marketing term that very few people understand well.


Q: If you have some type of retirement plan at work, do you think it's important to have that retirement plan, uh, before working with an advisor or if you've got one at work, do you even need an advisor?

A: Great Question! If you work for a fortune 500 company, chances are you can access a certified financial planner or some other type of planner through your work benefits. A a lot of them, as part of the 401K package, will provide some kind of planning services. So you may be able to tap into that before you have to hire an advisor.

Having said that right, the retirement plan that you have at work is kind of limited to work, right? It's designed to help you save for retirement. They'll help you. Some of them are salespeople, and they'll sell you other types of policies. Some of them are working for the plan administrator, so. You know, this fiduciary word coming in. Again, the fiduciary of your retirement plan, of your work plan has a responsibility to you as the, you know, participant in the plan. And one of those is to educate you on the decisions that you make of what investments to choose and things like that. So they will provide resources for you.

Having said that, those resources are gonna be limited. They're not going to do in-depth planning for you, so you may want to engage a financial advisor.

Q: When Should You Hire a Financial Advisor?

A: When you start asking yourself those questions, "when should I retire?" or "Do I have enough?" that's the point where you wanna start talking to financial. And potentially engage with them to start managing your money or to help you plan.

The question of how are you're gonna transition from working into retirement? Because the dangerous part is really that transition period, the five years, five to 10 years before retirement, and then the first five to 10 years of retirement are, we're a mistake that gets made, whether it's you retired a little too early, or you invested it, you know, and you took out money in a down market.

There's all kinds of like little hidden gotchas, but that's where mistakes are very hard to recover. 

Q: What Should I look for in an advisor?

A: The attributes you wanna look for right, is you wanna know what is their knowledge base? Most states don't regulate the term, and it's not regulated on a federal level, So anyone can technically call themselves a financial advisor.

So you wanna know first what makes you a financial advisor?

And they may tell you, Oh, I have an insurance license, or I, you know, I passed this, this designation from this college, or from this, you know, uh, governing body, right? Or they may say, I've got this license from this other governing body. You wanna know what makes 'em an advisor?

The next question is, what makes you an expert in retirement?

Right? Maybe this person is just really good at. Maybe this person's just really good at stock picking. So you look at, you know, what, what makes you a financial advisor? What's your education? What's your experience? And then ask them, what is your philosophy, right? What is your approach? How are you gonna solve this problem for me?

And you should get that. All of that should be, you know, they should communicate that to you before you sign an agreement. Right. And, and this is something that I teach all the financial advisors I've ever worked with, right, is really before the first meeting or if the first meeting, you know, between the first and second meeting that all those questions need to be answered.

Because if you, as the consumers, you, as the person who's hiring this person has any question as to what that experience will look like, what, what it'll be like to work with this financial. Then you shouldn't work with them. You should not sign on the dotted line. You need to know what you're buying because getting out of an advisory relationship is usually pretty difficult. You may think like, Oh, well I'll just go down the street and hire another advisor. But we both know that that involves signing lots of paperwork and waiting for things to transfer. And, and the real problem is, is when those assets are transferring, What? It depends what's happening in the market because you may lock in losses, you may miss out on returns, You may, who knows what's gonna happen.

So you want to try to find someone who can really work with you long term, uh, rather than, you know, shopping around. But you wanna shop around beforehand, right? So if you don't get a good vibe from the first advisor, go down the block to the second advisor, right? You there? There's no reason not to shop.