Broker Check

Choosing a Financial Advisor

Once a month I receive an invitation to a dinner seminar where the financial advisor promises me a delicious dinner, along with an informational seminar on wealth management.  After twelve years in a firm that used that marketing strategy, I can say that I never open those envelopes. They proceed directly to the recycle bin and here’s why:

First of all, if I want to eat out, I would rather dine with friends in a warm and inviting atmosphere.  Anyway you put it, the meal is the price for the sales solicitation, however the material is presented in your invitation. So “buyer beware” if you accept this dinner offer, be prepared for phone calls requesting a meeting with the financial advisor after the dinner Is over. And, rightly so, he paid for dinner, so, it’s a little like a date.

The attendees at these dinners are the elderly, perhaps looking to stretch their social security dollars so they can leave their savings to their heirs, who by all statistics, will eat all of mom and dad’s hard earned savings in a very short period of time. A while back, when I was with a firm who did dinner seminars we had two women who attended a dinner. After they enjoyed their dinner, coffee and dessert, the two ladies stood up and informed me that they couldn’t stay for the presentation because they wouldn’t understand any of the material.  I have often wondered how their financial situation is working out for them.  If your doctor informed you of a health issue, wouldn’t you get all the information you could?  Is your financial health any different?

In many cases the financial advisors who host the dinners are reputable, knowledgeable and good financial advisors. If you are unhappy with your present advisor or don’t have an advisor, and like seminars, then by all means take them up on their offer of dinner.  If you enjoyed the dinner and learned something from the material presented, then it would be appropriate to meet with the advisor on an individual basis.

After many years in this business, I suggest you choose a financial advisor very carefully.  Consider the following:

  • Ask your friends or someone in your church family who they trust. Don’t ask them how much money they have made, they may lie.  Ask them who they trust. In my opinion, sales strategies like a dinner seminar are not a good way to select a financial advisor.  They may be a good way to meet an advisor, but the best way to select a financial advisor is by way of referrals and the by doing your own interview and homework.
  • Run a broker check against the name they provide.  Go online to and enter the person’s name in the broker check portion of the website.  If you are not computer literate, ask your friends or children for help. Read the report on the financial advisor you are researching and ask yourself the following questions:

a)      What is the advisor’s education?

b)      What is their work history?

c)       What complaints have their previous clients had and how were they resolved?

The commercials for the national brokerage firm who imply that the financial advisor calls when he needs money, while mildly amusing, unfortunately have some precedence, so buyer beware.

  • Prepare yourself for the first meeting. Ask the difficult questions, like “What do you do for your money”, “How do you get paid”? “What services do my fees provide?” Be sure to get a copy of the firm’s and investment advisor’s ADV as required by law.  Get your advisor’s services in writing.

The framework for long term investment planning is a financial plan.  You wouldn’t build a house without a blueprint, so why would you invest money without a plan?  That plan should include an intensive conversation with your spouse to discern long term financial goals.  It will mean hard work on your part to provide the data that a qualified financial advisor is going to require.  It is not meant to be FUN.  You will need to provide an estimate of current expenses and future expenses, and goals.  However, the silver lining at the end of the process means you will have a real PLAN for the future.  Updating your plan annually should be a brief process that can be conducted during your annual investment review.  Communicate to your advisor all pertinent changes that have occurred during the year so that they can update your goals and objectives.  Then when a life changing event happens, you can quickly tell how it may affect your financial health.

This advisor believes that every client is owed a financial plan and should be a part of our fiduciary responsibility when we hold ourselves out to the public as being an active part of the investment services system.

There are many good financial advisors out in the community, do your homework and research their strengths and weaknesses. Give them a chance to prove themselves before your sign on the dotted line.  If the advisor isn’t giving the service you think you deserve, then search again.

In today’s economic environment, our financial health is just as important as our physical health. Take care of yourself!