Broker Check

The top 5 Mistakes you should avoid when selecting a financial planner.

January 31, 2023

Hey Everyone!  Happy Tuesday - it's a cold (about 30 degrees this morning) and wet day here in San Antonio.  The kids are home because the schools are all closed due to the bad roads.  What a great day to hang out and watch a movie (while writing your blog post!)!

The title of today's post says it all - what should you look out for when you hire a financial adviser?  Here are five ideas…

Do your homework.  There are a load of easy and free ways to check out your financial adviser's background and disciplinary history.  The two best are FINRA's BrokerCheck and the SEC's Investment Adviser Public Disclosure Page.  They are free and super easy to use.  The other thing you should ask to see is the adviser's ADV2B which additionally lists their education and credentials.  For example, my ADV2B shows my degrees (undergraduate and graduate), outside business activities (otherwise known as "OBAs") and credentials with detailed descriptions of the credentials.

Avoid advisers with no credentials.  While I can't promote any specific credentials, the big three you should be looking for are Certified Financial Planner®, Certified Public Accountant, or Chartered Financial Analyst.   There are a host of other great credentials as well, but your adviser should have at least one of the "Big Three."  At a minimum it shows that they treat their work as a profession and not just a job. The “Big Three” are great, but there should be some additional credentials that demonstrate expertise in different planning areas.  For example, I do a lot of retirement income planning, and hold some credentials that pertain to that specialty.  The Retirement Income Certified Professional (RICP®) is offered by the American College of Financial Services – they also offer the Chartered Financial Consultant (CHFC®) and Chartered Life Underwriter®, among other credentials and degrees.  I also have two specialty credentials, the Certified in Long-Term Care (CLTC®), and the National Social Security Adviser (NSSA®).  These credentials require continuing education, which is something you should look for when you check your adviser’s background

Be wary of advisers with a narrow focus. There are a lot of great specialties within my profession but many advisers claim to be something they are not:  financial planners.  There are some advisers who say they do everything but what they really are is annuity salesmen.  Or perhaps they are what we call “asset hounds” – they just want your money so they can either charge you a brokerage commission or asset management fee.  Ask them about what to do with Medicare decisions, tax problems you and your accounting professional are working through, or basic estate planning questions, and they won’t have an answer for you.  They are also the advisers who use their product as the solution for every problem!  An annuity is a great tool to provide income and hedge against market loss but it isn’t an ideal choice for accumulation.  To an annuity salesman masquerading as a “financial adviser” or “financial planner,” though, the annuity will solve all your problems!  Watch out for these types of advisers

Don’t get too hung up on age or experience. While those of us with grey hair may project confidence and that we’ve been through a lot, many of the younger advisers have a few huge advantages.  First, they are most likely VERY technology savvy.  We have some great younger advisers on our team who are so good with technology it just makes your head spin.  Having problems with a website, how something works online, how to send a secure email, wondering what the heck Snapchat is, or any of those other mystifying social media platforms?  They know.  It’s fantastic to work with them because they have grown up with technology and a lot of this stuff doesn’t matter to me personally – but it does to some of my clients.  When I was growing up in the 1970s and 1980s in rural Minnesota we had FM radios, cassette tapes (in the ‘80s – I was 7 in 1980 so not sure what was going on before that!) and if you wanted to see a video you either watched one of three channels on TV or went to a movie.  Young people today have had media and technology in their hands since they could walk and they are very good with it.The other big advantage they have is that they are motivated and hungry! Remember when you were starting out?  How on earth were you going to pay for a car, or kids, or your first home?  Remember how hard you had to work and save?  Remember the people who had confidence in you and worked with you (or maybe agreed to become your client – hint, hint)?  How important were they to your later successes?  How hard did you work to earn and maintain their confidence?  My experience with young people, from my time in the Army to working with young financial advisers, tells me that they want to do great work, they want to help their clients and team succeed, and they are willing to work just as hard as you and I did when we were getting started.  Don’t sell them short and give them a chance!  They’ll run out every infield hit!  The final advantage they have over us is TIME!  I’m going to be the big FIVE-O this year and have to admit I’m a bit nervous about it.  I want to work about 25 more years, but we never know what twists and turns life will take, so perhaps I should say I “hope” to work that long.  A thirty-year-old has a much longer time horizon.  If I was in my 60s and getting ready to retire, I would look for a financial adviser who is 25-40 years old.  Why?  Because in 30 years, when you’re in your 90s, they are still going to be working.  Where will a 50- or 60-year-old adviser be?  Retired and hanging out with you on that Mediterranean cruise?

The last idea I’ll pass along today is that your adviser should be proactive about communication. If we unpack that idea it has a few underlying themes that stand out to me.  The first is that they should be proactive.  I cannot tell you how many times I’ve met a prospect whose adviser had never discussed retirement with them.  The client had been with the adviser for 20+ years but for some reason the adviser never thought to bring it up.  Even worse, the client had to ASK their adviser about retirement planning.  If the adviser is on their game, they should be asking questions about work, life and big events coming up.  They should be sending out emails, writing blog posts, keeping up with you on social media and “dripping” ideas on you on a regular basis. Secondly, they should be listening to you and making suggestions.  I am always telling people that a good financial advisor is like a good guide.  What does a good guide do when you come to a fork in the road?  They tell you what they think is likely to happen if you take the left fork or the right fork.  Most importantly, though, they turn to you and ask “Which way do you want to go?” Finally and most importantly, please remember that your adviser should be someone you can have an open and honest conversation with.  I have had to play marriage counselor, help clients get through the death of a loved one, deal with unexpected health issues, and all the other things that happen to us in life.  Your adviser should be someone you feel comfortable with and can open up to.  Think about the great doctors you’ve had – the ones who would take a few extra minutes and see how you’re doing, not just give you a diagnosis.  That’s what you want – an adviser who will really listen.

OK, I threw a lot at you guys today.  To summarize – when you’re looking for an adviser, check their background and credentials, make sure they really do planning and aren’t just salesmen, get someone the right age, and most importantly, make sure you feel comfortable talking with them.

Let me know if you want to chat or if you think someone you know should talk to me or my team.

Stay warm and enjoy the Super Bowl!  I’ll post again in a few weeks!


Our Team (feel free to call or text us on our direct numbers):

Matt Direct & Email: 726-727-6581,

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Jason Direct & Email: 726-727-6581,

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Mike Direct & Email: 726-727-6586,

Mission Financial Planners Direct & Email: 888-339-0093,