Last week I discussed the responsibilities that you have when working with a financial planner. This week I want to shift my focus to the expectations you should have when working with a financial planner. In other words, what should a financial planner be doing for you?
In today’s blog post, I will be sharing the 3 major things that you should expect.
WHAT TO EXPECT FROM A FINANCIAL PLANNER
EXPECTATION #1: They Ask A Lot of Questions
Some people are just difficult to be around. I recall the time that I broke my big toe when I kicked a ball in the backyard and just behind it was a huge tree root. I talked to the surgeon about my options and he told me that I could fuse it or just have it cleaned out. He was very callous and didn’t offer the pros and cons of each option. I was in a lot of pain and I could sense that he was ready to move on to the next patient. As a result, I was under a lot of pressure to quickly ask the right questions, and I didn’t even really know which questions to ask. After all, I’m not a doctor.
I realized at that moment that I didn’t want my own clients to feel that way. You shouldn’t be expected to know every question to ask. It’s the job of the financial planner to ask you questions that you haven’t even thought about.
EXPECTATION #2: They Have A Well-Defined Process
One of the things that we spend a tremendous amount of time on is our process. We want it to be very easy for clients to understand. And we want clients to clearly know what the next steps are.
One of my pet peeves is working with “professionals” who seem to be flying by the seat of their pants. In situations like that, nothing seems to be organized. They don’t proactively reach out to you to meet. They don’t clearly tell you what documentation you need to bring in. They don’t even ask very many questions (see Expectation #1). This sort of unorganized process makes me believe that they don’t really know what they are doing and I wonder if they will forget something. Imagine if an airline pilot didn’t follow their pre-flight checklist. If they forget one thing, it could be detrimental to all those on board.
A financial planner that has a well-defined process will not only provide you with much needed confidence in them, it will also save you a tremendous amount of time. After all, you don’t want them to keep coming back to you with requests and questions that could have easily been handled upfront.
We recently brought on a new client and they were very complimentary of our process. They’ve worked with other financial professionals in the past and they indicated to us that they’ve never seen a process as detailed and easy to understand as ours. This was confirmation that we are doing the right thing. And it’s the sort of thing that you should expect when hiring a financial planner.
EXPECTATION #3: They Actually Do Financial Planning
Last week, I briefly discussed that there is a huge difference between financial planning and investment management. Whenever we meet with a prospective client, I almost always ask them what their meetings with their existing advisor (if they have one) consisted of. In almost all cases, the meetings only revolved around the investment performance, yet the professional called themselves a “financial advisor”. In that scenario, they would literally only be advising on the investment, which is just one aspect of your financial life.
There is much more to financial planning that just investment management. When interviewing a financial planner, one good way to find out if they really do financial planning is to pay attention to their process (see Expectation #2). Do they ask you for more than just your investment statements? In other words, do they ask to see your Tax Return, Insurance Policies, Estate Planning Documents, Loan Statements, Pay Stubs, etc… Do they ask you questions that aren’t just investment related? After all, financial planning is designed to answer many other key questions in your life. Questions such as “How should I pay down my debt?”, “How can I save more in taxes?”, “How much house can I afford?”, “Will I run out of money in retirement?”, “Do I need a Will?”, etc…
In conclusion, when you’re doing your due diligence and looking to hire a financial planner, you should expect that they ask you lots of questions, have a well-defined process, and actually do financial planning. If you discover that they are not doing these things, then that may be your clue to look elsewhere. But if they are doing those things, then you likely have found a “true” financial planner!
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I would love to hear your thoughts on today’s blog topic. Are you surprised to learn that a financial planner does much more than invest money? What other expectations do you think you would have of a financial planner? Please share any thoughts, comments, or questions below.
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