Ep. #128 - 5 Mistakes to Avoid When Choosing a Financial Planner
When it comes to something as important as financial advice, choosing who to hire (or retain) is a huge decision. As life evolves, our needs and viewpoints can change repeatedly and there is no shortage of financial advisors and financial planners ready to throw their hat in the ring to have your business. So, how do you know if you found the right one for you? Listen in as Adam and Ben share their perspective on what they feel matters most in a client/planner relationship, and what mistakes you should try to avoid when choosing who you’ll trust to partner with you.
Chapters
1:15 Topic Introduction: Reevaluating Financial Professionals
3:21 Mistake 1: Misaligned Priorities
5:19 Mistake 2: Not Interviewing Multiple Advisors
7:10 Mistake 3: Choosing a Non-Fiduciary Advisor
10:22 Mistake 4: Lack of Transparency in Fees
13:26 Mistake 5: Choosing Based on Location
15:00 Conclusion and Final Thoughts
16:39 Disclaimer and Sign-Off
Listen on Spotify:
Full Transcript:
[00:00:00] Adam Werner: Hi everyone, and welcome to AB Conversations, where we will help you CFP your way out of it. A podcast where you get into the minds of a couple certified financial planners on how we think and feel about everyday financial planning questions, and what should really matter most to you. A healthier financial life starts now.
[00:00:27] Ben Haas: Good afternoon, Adam. How are you today?
[00:00:30] Adam Werner: Oh, just wonderful. How about yourself?
[00:00:33] Ben Haas: Excellent. Very excellent. Feeling great. Feeling ready for a riveting podcast yet again this week.
[00:00:42] Adam Werner: I'm laughing because all of the, all of the descriptors of how great you're feeling makes it sound like you're lying. Yeah.
[00:00:49] Ben Haas: So is it written on my face for those who are watching? No, it's it's been a long week, you know, we're close to the end of a Friday, but you and I promised we'd make this work, we'd bring energy to a podcast, so this is me just doing my best. You're calling me out for maybe being a little bit of a liar, with how I'm feeling, but nobody had to know that.
So thanks for, uh.
[00:01:10] Adam Werner: No, sorry. This is, it's good for the people listening to this, it's going to be great, promise.
[00:01:15] Ben Haas: So let me give a brief intro here and admit that I'm going to, I'm going to take a little liberty and this is going to be a little bit of a stretch, but in the spirit of post election season, which every four years is kind of this natural period for reevaluation of, you know, do I think there needs to be change or am I okay with where we at?
That's why people go to the polls. When it comes to our business and people either seeking out or choosing to keep a financial professional, there probably isn't that natural check in of like, Hey, is this working for me or is it not? So, again, a little bit of a stretch, but we thought what we talk about today are key mistakes that we kind of see, out there, whether they're people coming to us or, you know, whether we would be giving other people advice on, you know, how do you go about this?
What are the common mistakes for either selecting or choosing to keep a financial professional?
[00:02:11] Adam Werner: Yeah, it's, it's interesting because this industry in general, the financial advisor or the financial advice world. There are just, so many different approaches.
[00:02:24] Ben Haas: Yeah.
[00:02:25] Adam Werner: So, yeah, if you are looking at hiring an advisor for the first time, or making sure that, if I've been with an advisor for quite a while, but maybe you're just not getting the warm and fuzzy anymore, how do you even go about vetting?
Am I at the right spot? Is, is the way this person works aligned with what I want and what I need? So I think even just, just starting there, making sure that whatever advice you're looking for is aligned with what that advisor or what that professional can provide. Because again, there's so many different ways that an advisor can choose to work with their clients.
That you, you could be getting theoretically what you want from an investment standpoint. But if that advisor has just a different approach than what you need, the end result may not be serving you throughout that process.
[00:03:21] Ben Haas: So let's call that mistake number one, like priorities aren't aligned. And I'm thinking of a couple of different things.
You might've mentioned the first thing I was thinking of the service they provide, right? Are they giving financial advice? Are they really just managing investments? I'm you know, financial advisors out there, they may just have a product line or services that they want to provide that it doesn't really matter who walks in off the street, are your priorities aligned?
[00:03:45] Adam Werner: Well, I was going to say just to dig deeper. I know it's one of the points here. Even if you're working with someone who is a great communicator is transparent with fees and services and all of that. If they have a niche, if their specialty is to work with dentists, for example, and you're not a dentist, you may still be served well.
But if that advisor's focus is on a different type of clientele, it may not be the best fit. There may be another advisor out there that may specialize in exactly what you need that may just be a better fit overall. So that was just the point I wanted to make on the approach of the advisor. We've seen these niches, right, can get hyper, hyper specific for many advisors.
[00:04:32] Ben Haas: Yeah, I'm really glad you brought that up because I was maybe thinking a little bit more broadly, but it can be the same thing. We often talk about financial planning. We go through these different phases of life and we're kind of trained to give advice to different people in different phases, depending on what their priorities are or how they maybe have competing goals.
So there are definitely platforms, advisors that are really well suited to work with people that are still accumulating wealth versus those that are maybe distributing that, or maybe in a more legacy phase where now the conversations are wealth distribution, not wealth accumulation. I like this being number one, right?
If we could give advice to anybody out there, either looking for an advisor or reassessing if you have the right one, make sure the services that you need or that you're looking for are what they're really good at.
[00:05:18] Adam Werner: Yeah. So to that end, we'll call it mistake number two, is hiring the first advisor that you talk to.
Even if you really loved that first or second interaction with somebody, we often recommend, even for people that maybe we might be the first on their list of people to talk to. We highly encourage them to explore your other options. Talk to somebody else just to make sure that you are aligned, that to go back to mistake number one.
Mistake number two is you didn't interview more than one person just to that. Is this person the right fit? Because you may go somewhere else, talk to another advisor and get a different feeling, get a different vibe. Maybe their service is more aligned with what you're looking for. Or even though the first person may have been an okay fit, you may still just verify that, yes, that's the case, or, well, I've interviewed a couple more people and I actually went with number three because they really spoke to me and, you know, there was just an instant connection.
[00:06:17] Ben Haas: Yeah, it's like marrying the first girl you date, right? Everything might sound really good on that first date, but think about the, I know I'm making a joke here, but think about the importance of relationship.
You may have expectations on how you want to be communicated to. You may prefer for some of that to be passive through technology, or you're willing to lean in and interact with your financial world in that realm where somebody else is completely different, right? Look, meet, meet with me four times a year, kneecap to kneecap in your office.
That's what I need to feel comfortable. Yeah. I think if you are either finding the right person to start, or again, if you're reevaluating your situation, make sure that you understand how you want to be communicated to you're clear on how they communicate what services they provide the frequency of that.
Those are all really important parts of the relationship.
[00:07:05] Adam Werner: Yeah, for sure. All right. Mistake number 3. I would hope for most people that this should be an obvious one. Maybe this would have been number 1, but it's making sure you're working with someone who, is obligated to put your interests ahead of their own, right?
That's that keyword that a lot of people have heard now, which is fiduciary. So we certainly fall under that umbrella. But that's the key word to look for as a fiduciary, someone who is required to not just put you in an investment or in a product or in a service that is appropriate, but that truly is in your best interest.
Going back a handful of years, that was certainly I'll say more of a concern. I think that is, it's still a valid concern, but I think as this industry does evolve more towards advice and away from products, my hope is that finding a fiduciary is not the struggle that maybe it once was, not that long.
[00:08:01] Ben Haas: Yeah, and just to be clear on what a fiduciary is, and you can help me with this because I know we've used this analogy. Like you said, when this was really becoming a buzzword, we saw this analogy and we made sure we leaned into it because I think it describes it well. It's called the, the butcher versus the dietician.
Right? And if we can imagine that my buddy Adam's having a cookout this weekend and wants to buy a bunch of meat for all the people coming to his house, what might he do? We might go down to the local butcher shop and, you know, or here, Lenhartsville, Pennsylvania, maybe you go see Marlon Dietrich and you say, Marlon, you know, what's in the case?
What's good? You know, I'm feeding a bunch of people. You let me know what's good. Marlin's going to sell you meat, right? You went there looking for meat and he's going to sell you meat. He's not going to stare over his glasses across the counter and go, Adam, looking a little long in the waist, you know, why don't you leave here, go down the street and go get yourself some fish, Neidermyer, right?
Not, it's just not going to happen. That's the whole concept of a fiduciary is really supposed to be more like the dietician, right? Going to look at all your vitals, going to look at things from all angles. There's not really a product to be sold, right? That's not how they're compensated. You're compensating the dietician to do a fair assessment on what's best for you, educate you on that, and then help you make sure that that happens, right?
And that's where we sometimes see this and would call it a mistake. And I'm going to use the example of mom and dad pass away. Now you meet the children who are coming to us and saying, well, you know, I was thinking about just sticking with my mom and dad's person because, you know, they were with them forever.
This industry has changed a lot, right? And that's this is maybe a good critical moment to go. Well, that worked for mom and dad. And that was the industry not too long ago. But going back to our other points, what's going to serve you best now? Just make sure that you're with a dietitian. Make sure the way that they communicate.
This still is a service based industry. Make sure all those things are together. But first and foremost, they should be a fiduciary. Don't get sold meat just because you walked into the butcher shop.
[00:10:04] Adam Werner: This is where I have to disclose my dad was a butcher for, you know, 30, 30 some years and retired. So, thanks dad.
[00:10:11] Ben Haas: But again, it's not his job to take an assessment on whether somebody should have red meat, chicken or fish. His job was to cut it up, make it look great and sell it.
[00:10:21] Adam Werner: That's correct. So mistake number four, I think these things are all kind of interconnected, but mistake number four is just avoiding someone who may not be transparent with how they get paid.
We are huge believers in just transparency, setting clear expectations, just being crystal clear of here's what we're going to do, here's what's expected of you as a client, and by the way, here is how we get compensated so that they're hopefully removes any question marks on the integrity of the advice moving forward.
So, another thing to add to that is not just. Are they transparent? But do the services they provide and for the fees that you are paying, does that, are you actually getting value in your life for the fees that you are paying? Making sure that aligns.
[00:11:11] Ben Haas: Yeah, so great example here should just be the evolution of technology with investing, right?
Robo advising platforms, do it yourself platforms. I think there is absolutely a huge demographic out there that will be very well served in that space. The people that aren't, maybe more of the people that work with us that value the planning that goes with it, or value the service around making sure that all of these things are efficiently working together, right?
It's not just buying and selling investments. There's tax implication, there's cashflow needs, there's all the things that, you know, more of our retiree world need to worry about. But that is to say, know how somebody gets paid. And if they only get paid through the investments and that's really the service that they're providing, but that may not be the primary thing that you need, then find a way to try to align what you're getting to make sure that if you're paying for planning, you're getting planning advice, but maybe the we have people that we'd say, hey, keep your investments over here.
It's it's a more fee conscious way of going about it. So I think it's important to know how the person you are working with is getting paid, for sure.
[00:12:19] Adam Werner: Yeah. And so just to maybe put a little bow on that, I mean, I can't even count how many times we've been sitting in a meeting with a new person and, you know, looking at statements, trying to decipher. Do you know how you're paying your current advisor, and more often than not, the answer is I'm not really sure. I know they're getting paid somehow. I'm not writing them a check. I know they're getting paid, but I don't know how. I feel like that's a very common refrain that we hear from people over the years.
[00:12:48] Ben Haas: Well, and maybe we didn't say it earlier, but we certainly thought of this when we were going to do this topic.
We are living in a world now where most of these firms or practices have a pretty robust website. And because of the requirements of our industry are free and fair disclosure of these things. It's probably not hard to click around a little bit on their frequently asked questions, or maybe there's a dedicated spot.
Like, here's how we get paid. Here are our fees. To the degree that you're comfortable, jump on a website, click around a little bit. I think you'll learn a lot quickly without even having to pick up the phone and say, Hey, I want to meet for the first time and do an interview.
[00:13:26] Adam Werner: Yeah, the last mistake, maybe mistake number five is maybe just just choosing that advisor relationship purely off of location, right? It's the advisor down the street. It's close. It's in town. So why would I not work with that person?
[00:13:45] Ben Haas: Well, I think maybe that ties into the example of Hey, this is mom and dad's person.
So I'll just stick with it. And look, I know that we are the benefactor of that, right? Sure. Grew up in this community. We grew up around here. We're involved here. We're raising kids in the county. There's a lot of good that comes from knowing and trusting that person not as a person and not just a professional.
Yeah, the flip side of that is this is almost 2025 right? Technology. Zoom. The pandemic proved that to us. You can have a very robust relationship with somebody through video as we are recording this podcast. I know advisors now that I've met across the country that don't even have an office right now and while there are situations in my life where, like, look, I just want to be kneecap to kneecap with somebody.
I wouldn't want that to be the primary reason because so many different financial advisors, for every other reason that we've mentioned, operate differently, focus on different things. Location should not be the primary reason to be working with somebody, or you're probably sacrificing those important things, somewhere along the line, right?
[00:14:53] Adam Werner: Unless you're one of our lucky clients who happen to also be local. And we are so great. And we're also local. So thank you.
[00:15:00] Ben Haas: Look, there's, you know, we, we say this all the time. We need to be accountable to the services we provide to, right? Any day of the week, things can take their life cycle.
If we're not the best fit for people, we're not the best fit for people. But that doesn't change these 5 things are really all important to reevaluate from time to time, or, you know, as you've said, if you're looking for somebody, these I hope this is helpful. There are five really important things to think about.
[00:15:28] Adam Werner: And I'm sure, maybe there's more. But yeah, for our purposes today, I think those are good starting points of just some of the bigger red flags to at least keep an eye out for as you're talking to new advisors or interviewing or just confirming, am I working with the right person?
[00:15:45] Ben Haas: Anybody that's listened to our podcast, anybody that's worked with us, relationships are really important, and I think the industry is recognizing that too. We're not alone in saying that, hey, we really want to have depth of a relationship with our clients. Because the more that we know about them and what matters to them, the better the advice we can give on making sure that those things are aligned.
So, all of what we said is just to make sure that if you're paying somebody and trusting them with your financial life, make sure all these checkboxes are really there because it is that important. And you deserve that.
[00:16:17] Adam Werner: For sure.
[00:16:18] Ben Haas: Sir, have a fabulous weekend.
[00:16:21] Adam Werner: Thank you.
[00:16:22] Ben Haas: The best weekend possible.
[00:16:25] Adam Werner: Same to you. The best. The wonderfulest.
[00:16:28] Ben Haas: Catch you next time. See ya. Bye.
Hey everyone, Adam and I really appreciate you tuning in. Please note that the opinions we voiced in the show are for general information only, and are not intended to provide specific recommendations for any individual. To determine which strategies or investments may be most appropriate for you, consult with your attorney, your accountant, and financial advisor, or tax advisor prior to making any decisions or investing. Thanks for listening.
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Investment Advice offered through Great Valley Advisor Group, a Registered Investment Advisor. Great Valley Advisor Group and Haas Financial Group are separate entities. This is not intended to be used as tax or legal advice. Please consult a tax or legal professional for specific information and advice.
