More Than Money
Issue #43

More Than Money Magazine

Table of Contents

“Sourcebook: Finding a Money Advisor”

who'll play on your team

By Elfrena Foord and Chuck Ebersole

What do people look for in a financial advisor? For starters, they look for a licensed professional with the requisite education, experience and competence. They want to be sure that he or she keeps up new or emerging options and opportunities in financial planning.

These are baseline criteria, however. Using them alone may result in only a basic financial advisor.

People with substantial resources often have higher needs and expectations. They may want an advisor to look at their finances holistically and help them envision their optimal possibilities. Equally important often is finding someone whom they can trust to be on their side. In our work, we call a client-centered financial advisor a "wealth coach." If you seek a wealth coach, here are some "screens" you may apply as you search.

Trust . You can trust a financial advisor that you know is focused on your needs, feelings and goals. If you are only buying an insurance policy, for example, trust may not be a big issue. But it matters if your needs are broad or complex. A wealth coach listens to your priorities and values as well as your financial needs and discusses possible long term implications of options. In The Trusted Advisor , David Maister identifies warning signals to help you spot a planner who is focused more on his business than on you. You may wish to avoid a planner who:

  • Overshadows your stories with theirs or states their views of your needs before fully hearing yours
  • Tries to appear clever, witty, interesting to you-rather than interested in you
  • Poses closed-ended questions or avoids direct answers
  • Watches you as if you were a television set (merely a source of data)

Clarity . A client-centered financial planner will help you become clear about what you really want, the key to any good decision. Consider the couple deciding what to do with $500,000 they inherited. Their stockbroker suggested investing it in a management program with a good record. A wealth coach then helped them explore other ways the gift might enable their financial vision. The couple said they wanted a second home and to have zero debt at retirement. They then began to look at tradeoffs between these two goals, but the point is that neither one required a new investment program. Their decision was driven by their goals.

Process . A good planner focuses first on how you frame your goal or problem to be solved. Only when you are clear on that does the planning shift to strategies or solutions. When you're clear "above the line," as it is called, you can rule out inappropriate solutions "below the line." Wealth coaches explore the "what" with you before turning to the "how." Another couple wanted to plan their $25 million estate. Their real estate attorney proposed a plan built around transferring their business to their children in the most tax-efficient way possible. The couple did not take his advice. Why? As they later realized, that plan didn't deal with their major concern: their ambivalence over leaving a lot of money to children who had not demonstrated financial maturity or the ability to run the business. Many estate plans go unfinished because the client's real issues have not been addressed.

Style . A wealth coach adapts to your learning style. Some people want the larger solution first, followed by the underlying facts. Others want all of the data to build logically to a clear conclusion. Some people find themselves glazed by a glut of information and only want the basic pertinent facts before making a decision. A wealth coach will try to respond to your way of taking in information.

Completion . Your advisor should take responsibility to make sure all aspects of your plan are followed through on. Some advisors focus on one or two pieces of plan in their area of expertise and leave the rest to the client or to chance. A wealth coach will really coach you to act on your plan as he or she manages the process to completion.

As you can see, there are subjective components to what a wealth coach does. But money is a subjective realm, so why not have a financial advisor who recognizes that? A wealth coach should be able to learn what you want, identify winning strategies and give you the confidence to act on your plan.

Elfrena Foord and Chuck Ebersole are partners in Foord, Van Bruggen, Ebersole & Pajak, of San Francisco, which provides financial planning for high net-worth individuals.

1990-2005, More Than Money, All rights reserved