Recently, I met with a man whose wife had recently died.
They were married for five years, and both had prior marriages. He had his money and she had her money.
She had recently cashed in her small IRA account to pay for things she wanted.
Also, she cashed in an annuity with huge gains that now became taxable. The survivor knew nothing about these two transactions. The bottom line was about $25,000 of additional income taxes.
His comment to me was “I trusted her, and I know she trusted her financial advisers to do the right thing by her.”
Trust is quite an illusive characteristic in a rather self-serving, ego-driven world.
“When we met with the advisers, I said little because I didn’t know enough to ask good questions,” he said.
I have noticed as we get older, we may lose a bit of our confidence when it comes to dealing with complex financial issues.
I have also noticed that many so-called financial professionals have little patience for their older customers or clients. I occasionally see them talking down to their elderly clients. They can be quite condescending.
When it comes to your financial decisions, one of the first questions should be “Whom can I trust?”
Some consumers try to “go it alone” and do quite well.
Reading books, attending seminars, talking to anyone who’ll listen, or using some of the latest software programs, they struggle through the process.
Others do not.
So what do you do to find a compatible adviser? Here are a few ideas to help.
1. Experience is critical. Find someone with at least three years of practical experience.
Be sure your adviser has a legitimate professional designation and that they are keeping up with continuing education. Most designations require the passage of several exams and educational requirements.
2. Your advisers should be members of the recognized professional associations.
3. Does this mean that only those holding these designations and memberships are qualified? Certainly not. However, it’s a good place to start.
4. Each adviser should have a published code of ethics.
5. Your adviser should have a commitment to your goals first. Your relationship should be long-term, and it should include follow-up service for the life of your relationship.
6. Their office should have sufficient staff, facilities and computer equipment.
Your adviser should be capable of providing a comprehensive analysis, whether you use it or not.
I recommend that you do some telephone screening before you meet with any adviser.
Then make an appointment at the adviser’s office. You can tell a great deal from what you see and feel when you visit their business. If they hesitate, think twice.
Your initial interview should be at no cost to you. It should last about an hour.
Remember, you are interviewing them.
Study and ponder before you invest your money and give your trust!