The Small But Powerful Guide To Mindful Financial Planning

“Becoming wealthy is not a matter of how much you earn, who your parents are, or what you do.. it is a matter of managing your money properly.” ~ Noel Whittaker

You don’t have to be wealthy to be able to benefit from good financial advice.  A good financial planner can help with everything from choosing the right life insurance, to minimizing tax consequences, to estate planning.

The objective of a financial advisor is to help you grow and protect your assets. But keep in mind, not all financial advisors are created the same. Some are more mindful than others.  A good advisor will help pinpoint problems, set goals, suggest strategies, and provide objective opinions.

One of the major problems with financial planners is divided allegiance. They could have your best interests in mind financially however, their interests can run interference as well.  For example they are also looking out for their families, their goals, their job, their income. This brings forth an unfortunate scenario:

Financial planners make more money by putting you in investments that are bad.

How is this possible?  The planners get kickbacks from the companies in which they place your investment – with the more lucrative kickback coming from the worst investments.  Remember they may be looking out for you financially but they are also in business to sell you financial products.

To find the best independent financial advice follow a few simple promethean savvy guidelines.

Promethean tips:

Use a fee-only planner. This type of planner is paid only by you and there is no risk of other potential kickbacks. Fee-only planners typically will charge you by a certain percentage of your portfolio they manage. Another management fee option would be paying them by the hour. Be sure the management fee is not too costly. One percent of your assets is reasonable while 2.5 percent is unreasonable.

Another type of fee only planner are those that don’t manage your portfolio. Basically, you pay for the advice but implement the changes yourself.

Here are 2 good online sources for finding fee-only planners:

NAPFA.org and GarrettPlanningNetwork.com.

These websites have a “find-a-planner” option.  This tool will help you locate an advisor near you.

Due diligence. Be sure the planners on your short list have a clean record of disciplinary actions. Find out by going to:

• The U.S. Securities and Exchange Commission Web site at www.sec.gov or calling 1-800-SEC-0330. Look for a link like “Check Out Brokers & Advisers.”

• You can also contact your state agency that monitors investment adisors.

• Utilize the BrokerCheck at the FINRA Web site, brokercheck.finra.org, or call
  1-800-289-9999 to do a little background work on stockbrokers.

Schedule interview with 2 to 3 pay-only advisors. This should be an in-person, free of charge interview. Think about the help you may need: mutual funds, stock options, insurance etc.

Practical assessment. Choosing the right advisor can be placed into three basic tasks. These tasks are to assess the advisor’s:

• Technical competence
• Trustworthiness
• Compatibility with you

Here are four due diligence questions that will help you assess an advisor:

1. What type of credentials does the adviser have? How long have they been doing this line of work and do they work alone or as part of a bigger company.  Each will have it’s good and bad.  An individual might be able to offer you much more personal attention but they may not have the resources to offer as many services.

2. Do they listen? Hey, look, it’s your money.  If the advisor seems like they’re just ‘squeezing you in’ it may not be a good fit.  You will need to meet with your financial counselor fairly often and you will need to feel confident that when you do you are their only priority.  You don’t want to feel like you are being rushed out of their office because they have another appointment.  Along these lines you also need to pay attention to how clearly they explain things.  The best advisor in the world won’t do you any good if you don’t understand half of what they tell you.

3. Will they meet with you as often as you want? Although you can’t abuse this either.  They will be working with many clients and you really don’t need to meet with them more often than once every few months generally.  Depending on your circumstances meeting quarterly is probably often enough.  If something comes up in your life, say the birth of a child, or the death of a spouse, you will likely meet with them to make the necessary changes, but usually every few months is sufficient.

4. Do you like the adviser? I know that may seem like a dumb question, but it’s not.  This is someone who will be handling your money.  You not only need to make sure they are qualified, and that you can trust them, you also need to feel comfortable working closely with them.  If you feel like they are condescending or rude, you won’t want to hire them because you won’t enjoy working with them.

It’s all about you and a good financial mentor will never forget that.  It’s your money, your future and your dreams. If the advisor does more talking than listening you may want to run away.  It’s not about them just selling you all the time, it’s about them getting to know your unique needs and helping you find the best way to fulfill those needs.

To make sure your money works as hard for you as you work for it, get the best independent financial advice you can.  Use the guidelines above to help you locate someone who can help you accomplish all the goals you’ve set for yourself.

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*photo credit: steve wheadon