In a previous blog, we discussed the appropriate time to hire a financial professional. We’d like to dive a little deeper into that and discuss what’s expected of each party in the relationship—you and the financial professional. There needs to be commitment and communication from both parties for it to be successful, just like a personal relationship!
Many people we work with “know a guy” they use for financial planning and other resources, but few of them can tell us about the actual services they’re using and the value they offer. This begs the question: Are you working with the right financial professional? The world of finances is complex, and there’s a lot to keep up with. The lines are often blurred as to who can do what for you, so it’s easy to remain stagnant from indecision. But there’s a cost to doing nothing, which looks different to everyone. That cost could be anything from missing financial goals to not having proper insurance coverage. The potential drawbacks are too abundant to name here.
Make Sure They Meet Your Criteria
When you’re evaluating the right person to work with, there are a few things you should do:
Ask: “Are you a fiduciary/do you have a fiduciary responsibility?”
A fiduciary has a legal obligation to always recommend what is in the best interest of the client and must put the client’s financial interest above their own.
Ask: “How are you compensated for the work and value you provide?”
Everyone should be fairly compensated for the work and value they are providing. While there is no “right” answer to this question, the response will give you information that’s vital to your decision. If the professional can only be compensated on insurance commissions, beware that they may only recommend insurance products because that is how they are compensated. For advisors that can only be compensated for assets under management, beware that their recommendations may be tilted toward managing as much of your liquid assets as possible. Typically under these compensation models, there are areas of the client’s financial planning that are overlooked or not addressed because there is little or no compensation for doing so.
Clearly define what your expectations and priorities are in engaging with a professional.
What do you hope to gain from this partnership? Make your goals known, and an experienced professional will help you set expectations and provide some insight into the feasibility of your financial aspirations.
Agree to a timeline for goals and objectives to be accomplished.
We can’t think of anything that isn’t enhanced by a solid plan. When you work together to establish a reasonable timeline with attainable goals, you’ll find yourself in a sound financial situation.
Conclusion
There are plenty of great financial professionals out there. The trick is finding the one who’s right for you. This “right one” is different for everyone, as financial goals are as numerous and diverse as the people who hold them. Take the time to consider your options and figure out who your ideal candidate will be. It’s worth it!
Financial plan recommendations can be implemented with the advisor of your choosing. Implementation of specific products or services may result in commissions or fees outside of the financial planning fee.
The views and opinions expressed are those of Michael Cammarata only. Any examples used are generic, hypothetical and for illustration purposes only. Investing involves risks, and past performance is not indicative of future results. Securities and investment advisory services offered through qualified registered representatives of MML Investors Services,,LLC. Member SIPC. Tide Creek Financial Group is not a subsidiary or affiliate of MML Investors Services, LLC, or its affiliated companies. Supervisory Address: 11350 McCormick Rd., Executive Plaza IV, Ste 200, Hunt Valley, MD 21031. 410-785-7654.
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