More Than Money
Issue #25
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Working with Financial Professionals

Table of Contents

“The Challenge to Find Financial Pros You Can Trust”

by Judith Sawyer

Judith Sawyer has been an editor of business-to-business publications for 25 years. She served as managing editor of this issue.

Based in part on interviews conducted by Sally Sheklow

Armed with some basic know-how and an understanding of your own needs, you, too, can find, evaluate and manage the advisors that are right for you.

Larry Evans had his first encounter with a financial advisor when he was 18. He recalls, "I remember meeting with this old guy who I couldn't relate to at all. I sat there listening and thought, 'This sounds just like a sales pitch.'" It wasn't until several years, and two advisors, later that a friend recommended someone who shared his own values. "Until then," he says, "I thought financial professionals were all about the same."

Roger Strauss, helping his mother with estate planning, was unhappy with the accountant their lawyer brought in. His mother wanted to create a land trust and protect the trees. The accountant suggested they "subdivide this land into seven parcels to make a killing." Strauss says, "This accountant was a poor communicator who talked in numbers, gave scenarios, built this whole structure of options. He didn't understand our values of land stewardship. My mom also didn't like his speech pattern. He had a way of just spitting out words. He talked to me and not her. I think he was being sexist and ageist. He wasn't even speaking to her, the person whose money it is."

Olivia Anderson inherited a money manager from her grandfather. She likes him but dreads calling to ask for money, because he makes her feel she has to justify what she's spending it on. Furthermore, remarks he has made about "her generation" indicate that he doesn't see her as an individual. She's thought about finding another advisor but says, "It would go against everything that's been laid out for me." She asks, "Do you work with what you have or do you break away from what's already there?"

Evans, Strauss and Anderson have one thing in common: In wrestling with how to allocate their assets, each suffered from dealing with financial advisors who didn't understand their values and who seemed to make little attempt to understand them.


"Wealthy people," says wealth counselor Joanie Bronfman, "are taught to assume that others are interested in them only because of their money. These beliefs form an obstacle to the development of trusting, close relationships." This is especially true with regard to financial advisors, who, if unscrupulous, may see wealthy clients as their ticket to ride onto easy street. However, both clients and financial professionals agree that trust can be won if it's founded on the bedrock of an advisor's competence at three levels: technical, emotional, and ethical. Certified financial planner Richard B.Wagner, JD, CFP, puts it bluntly, "Trust the people you're dealing with but have enough knowledge to know whether they're misleading you." Even if you are young or inexperienced, you can learn to assess those competencies for yourself.


As Deanne Stone and Barbara Stanny point out in their booklet, Choosing and Managing Financial Professionals , the term "financial professional" (FP) is loosely used, a catchall title that encompasses a range of experts - money managers, stockbrokers, certified financial planners, investment management consultants, accountants, estate planners, lawyers, bankers, and insurance agents. Each has some area of expertise to offer, but many of their services overlap. Which ones you choose and how you decide to use them depend on your needs.

But judging from experiences like those of Evans, Strauss and Anderson, finding a responsive, understanding and competent advisor is not always easy. The very size of the field is intimidating.

The financial industry has entered a vastly expanded new era. Laura Koss-Feder in "Smart Ways to Find a Financial Planner" ( Money magazine, March 1997) estimated that there are "some 450,000 stockbrokers, insurance salespeople, and outright cranks who claim to be effective financial planners." Furthermore, there are few legal barriers to prevent any Tom, Dick or Mary from setting themselves up as a financial advisor.

How, then, given such a disconcerting array of choices, do you separate the wheat from the chaff? How do you find advisors who are qualified to do what they say they can do? How do you evaluate their expertise and trustworthiness? How do you find those who share your values, or who are at least willing to hear you out and help you achieve the financial goals that matter to you?


Traditionally, financial advisors of all sorts have focused on preserving capital, increasing assets, and reducing taxes. Being good at number crunching and researching financial services has been the prevailing measure of competence. Small wonder, then, that most people's image of financial professionals is still based on that model. "The financial industry itself doesn't support personal relationships," says Georgette Frazer, CPA/PFS, CFP. "They don't ask much about life goals."

Nevertheless, awareness that some clients want more than just an expanding portfolio is growing, especially among "certified financial planners"- professionals who specialize in helping clients understand their total financial picture. Today's holistic financial planning pros can not only help you with retirement and estate planning, asset allocation, and tax and cash flow planning, but they can also help you create a detailed, long-term financial plan that will let you deploy your resources in more satisfying and socially responsible ways.


Let's assume that you want to find a certified financial planner (although the process that follows would be similar no matter what kind of advisor you sought). First, ask friends whose financial situations are similar to yours for leads, or seek referrals from other professionals you trust, such as lawyers, accountants or bankers. If you have no other recourse, there are planners' trade groups you can contact. The National Association of Personal Financial Advisors (NAPFA), for example, and the Financial Planning Association (FPA) have professional standards for membership. The Social Investment Forum publishes a list of investment managers who engage in the social investment field, including some who also do financial planning. (See Resources, page 23)

Now that you have asked around and found two or three promising candidates, it's time for the "job interviews," and you're the one who's hiring. It's your responsibility to ask the right questions, to probe for the planner's technical, ethical and other qualifications. At the same time, you'll see how comfortable you are with the planner and how well the two of you communicate.

Does your financial planner need to share your values? Bob Levin, a satisfied client who has had no trouble with his financial advisory team, says, "I don't care what their values are. If they're good, like a good psychiatrist or lawyer, they will listen to you and respect your wishes." For Larry Evans, however, shared values, even a shared sense of spirituality, are critical. To ascertain whether you've found that, he advises, "Listen to your intuition, to see if feels right or doesn't."


To be sure the planner is qualified to advise you, he or she should have at least five years' experience in a financially related field, such as accounting, insurance, banking or stock brokerage, as well as actual advisory work. Look for academic degrees posted on the wall, from an undergraduate degree in business to a Master of Science and Financial Planning to a Master of Business Administration, as well as credentials that involve the broadest training, like a Certified Financial Planner (CFP), Chartered Financial Consultant (ChFC), or Professional Financial Specialist (PFS). These latter certificates indicate the planner has passed a series of exams, taken continuing education courses in financial planning, and agreed to comply with the group's code of ethics. None of these say anything about his or her judgment or integrity, but they're encouraging signs.

It is also your responsibility to ask how an advisor gets paid. Time after time, when talking about their advisors, clients confess to financial planner Greg Garvan, "I really don't know how I pay the guy." Garvan's business is fee-only, but he knows plenty of honest advisors who work on commission. The point, he advises, "is to be a very aggressive consumer and say, 'I'm not only looking for the cheapest deal in town, but I sure want to understand what I'm paying for and what I'm not.' And if people won't be up front with you or if they take offense, say, 'Forget it,' and find someone else."

The next step is to ask the planner for names of clients in your circumstances and call them. Don't just accept a general accolade. Ask about the planner's strengths and weaknesses: Is she responsive to phone calls? Does she take time to explain why her proposals are appropriate for you? Is her fee structure fair, and do you have questions or concerns about it? Then go one step further and ask the advisor for names of lawyers, accountants and other pros she has worked with. Ask those people whether the clients they've referred to the planner were satisfied with the service they received.

When you decide to do business with a planner, insist on a contract or an engagement letter. This specifies, in writing, the terms of your agreement, the services you can expect, and how long the agreement will last.

You may need several meetings to discuss your current financial picture and your goals. Only then should the advisor complete a comprehensive plan. You can then ask the planner to implement the recommendations or take them to your stockbroker, mutual fund, or other advisor.

Whatever financial professional you hire, you will want to keep monitoring their performance and your relationship. Jane Lewenthal, an investment management consultant for 15 years, primarily plays this role-evaluating and supervising money managers on behalf of clients. She gets to know a client's values so she can help them choose the right managers, recommends asset allocations and changes, monitors and evaluates each portfolio for performance, and oversees and coordinates the team on behalf of the client. When necessary, she also fires managers who don't perform well-something a client who forms a personal relationship with one money manager can find hard to do. She also knows which experts to call when an attorney is needed to draft a charitable structure, for instance, or when advice is needed on the tax implications of social venture capital.

Lewenthal stresses, however, that it's ultimately the client's obligation to manage their financial advisor. To be able to do that, she says, "You need to know yourself and to share that with your financial professional so they can make reasoned decisions. Let them know your concerns, your feelings and thoughts, and the impact you want to have in the world." If someone treats you condescendingly, Lewenthal counsels to put a stop to it. "Don't let anyone treat you that way. It's their responsibility to explain in a way you can understand. Don't just rubber stamp recommendations. You don't have to become a technical expert, but you must hold the expert responsible to explain and inform."

Elizabeth Glenshaw, a socially responsible investment advisor, emphasizes that financial advisors need to question when they are imposing assumptions that don't fit their client's world. A telling case in point involved a man she describes as "a little eccentric." She recalls, "He would come into the bank where I worked, take out a chunk of money in cash, go down to the park, and toss it in the air. He did this about once a year. He had plenty of money and it made him so happy to watch people's reactions to the 'found money.' It drove the bankers nuts, worrying about him literally throwing his money away.... I thought, 'What the heck, he gets such pleasure out of it. Who are the crazy ones here?' I think this captures all the emotions people harbor about money. I can't say it was right or wrong, but it made him happy. This really influenced my approach to building relationships with my clients. It's what they want to do that's most important."

Though finding the right financial advisors takes effort and persistence-from evaluating your goals, to the interview and selection process, to managing the relationship, to evaluating your returns-the payoff will be your own increased financial empowerment as well as the pleasure of having your affairs in smooth working order for a long time to come.

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