Finding the Prescription for Better Financial Wellness
Or, how to choose a Financial Planner
I shared it with pride—my first expert opinion in a popular publication.
How to Choose a Financial Advisor in Canada
Of course, those closest to me shared praise and a love of the doctor analogy. But, questions often followed: "Why should I ask an advisor those questions?" and "What do I do with the responses?" Arguably, that’s the most crucial part of the process.
So, I decided to write a longer-form version of the article with the gaps filled in.
Whether it's your first time seeking financial help or you want to improve on the advice you currently receive, not knowing how to find the right advice is often what stops us from trying.
We lack the strategy to filter out those who can help us from those who would help themselves.
We think of investments, mortgages, insurance, tax planning, and cash flow management when we think of financial advice, all essential elements of our financial situation. But they're nothing more than the "medication prescribed" to treat the issues you happen to have.
What we're looking for is a guide, a coach, a teacher - a financial planner.
Someone that creates actionable steps to move us from where we are now to where we want to be. And, the process and steps they recommend are more critical than the investments or tax planning prescribed.
How a doctor creates and shares their diagnosis is more important than the medication. If their diagnosis isn’t accurate, what they prescribe won’t help. The same goes for financial planners.
The key is working with someone who’s capable of the correct “diagnosis.”
What ails you?
We don't show up at the doctor and say "help me" without a reason. There's always something we have concerns about or want to understand better, and he same goes for financial advice
Maybe you’ve experienced a significant life change, have one on the horizon, or you simply want to know how to improve what you're already doing.
If you’re about to retire, maybe you have questions about your pensions and how to create income.
Maybe you’re going through a divorce and need some help starting fresh, so you have questions about cash flow and mortgage qualifications.
Start by listing what's on your mind and where you think you could be doing better. It doesn't have to be perfect, but be as clear as you're able.
Then it’s a matter of how you want to work with your planner: Do you want a one-time planning engagement, and then you’ll do all the transactional work yourself? Or do you want a plan with the option for an ongoing relationship?
By clarifying your needs and expectations of service, you’ll have a deeper understanding of the type of planner you’re looking for.
Find your planner
When people meet with a financial planner for the first time, they often come in, guns blazing - as we would with a doctor, sharing everything we want help with. But, to help filter salespeople from planners, and general practitioners from specialists, we need to take a different approach.
It’s best to open with some questions so you can understand who they work with:
“Who is your ideal client?”
“What problems do you help your clients solve?”
“Why do you believe that's a significant problem to solve?”
Do you sound like their ideal client, and do the problems they solve sound like yours? Do you feel their passion for their work?
If you can nod your head with good feelings so far, then it’s time to ask the deeper question: “Who do you not work with?”
The key is to understand their awareness of who they work best with and avoid planners that try to be everything to everyone. If you can find someone who works specifically with people like you, the value you’ll receive will more than likely be worth the money spent.
Speaking of money, the final question to ask is: “Who pays for your services?” Ideally, you would pay your planner directly, as it has the lowest potential for bias. If you pay indirectly (perhaps through a product) or someone else pays them, then you may need to do some more research to understand potential conflicts of interest.
While more conversation is required, these questions should be enough to ensure they know how to diagnose your problems. You should leave the meeting understanding their approach, their values, and whether they have the potential to be a good fit for you.
From there, it’s up to you to decide whether or not you want to connect with them again, or look for someone else. Have these conversations with as many planners as you need until you connect with someone that will improve your financial well being - just what the doctor ordered.