I thought I’d try a twist on this week’s column by putting my heavy sarcasm to work. So here it is, my official (tongue in cheek) three-step process for picking your perfect financial advisor:
– Make sure he’s cheap – after all, the best doctors and lawyers charge nothing, and you yourself work for free, don’t you?
– Make sure she’s not local – what intelligent professional would choose to live or work around here? (Don’t look in the mirror.)
– Make sure he’s not credentialed – continuing education can be a distraction from your needs. Besides, education and experience are highly overrated.
Alright, you get the point. But when it comes to professional advice, I’ve seen too many folks decide “cheap is good, free is better” and “the grass is always greener in a different area code.” Truth is, I have experienced great medical care delivered locally (Mayo Clinic isn’t really unparalleled), I know many of the great legal minds in town (high-priced Chicago attorneys simply pay more rent for their office space), and there really are local advisors capable of delivering top-rate financial advice (but a free meal from an out-of-towner seems a perfect appetizer for financial advice).
So, how does one find a good local financial advisor? Here are some simple steps (sans sarcasm):
– Approach financial advisors with the same respect and expectations you would approach a doctor or lawyer. If you don’t feel that’s possible, then you’re approaching the wrong advisors.
– Ask about their training and experience. You want gray-haired experience in a variety of economic cycles.
– Ask how you pay for their services. How much you pay and how you pay (commission or fees) is secondary to how the answer is delivered. If can’t get a straight answer on cost, what other information isn’t fully explained?
– Don’t allow a well-delivered pitch (or a well-served meal) to become the primary driving force for finding the person you’ll trust with your financial future.
My tongue-in-cheek suggestions may sound like absurd criteria, but there is regrettable truth behind them all. With interest rates at historic lows, stock prices on wild rides and economic concerns at every turn, finding a good advisor has never been more important.
And no, you can’t just pick the one wearing the nicest suit.
DRUMMOND OSBORN, CFP is lifelong LaPortean and partner in OSBORN Wealth Management a local financial advisory firm. Fed up with seeing the consequences of slick sales and out-of-town attitudes, he wrote the special report “Five Must Ask Questions Before You Invest.” If you have a question you’d like answered in a future column or would like a copy of his special report, e-mail him at Drummond@osbornwealthmanagement.com.
