man globe

Here’s how it should be done: If you’re a high net worth individual with a complex financial situation, you probably need a highly specialized fee-based financial planner (but you probably already have one, so I’m not writing this for you). If you’re among the rest of us, find an independent advisor from a trustworthy source. (An independent advisor is one who can offer many products from many companies, and who has no assigned sales quotas.) A referral from a trusted friend or relative usually works best. Don’t concern yourself with credentials. While education and training are certainly important, demonstrated loyalty and integrity are much more critical. If the advisor has done well by someone you trust, he’ll probably do alright by you too.

The advisor’s objective in your initial meeting is to establish a sense of trust. Consider carefully how he goes about this. Is he confident? Does he seem to know what he’s talking about? Does he care about helping me, or just reeling me in? Is he trying to offer me a solution before he’s had an opportunity to understand the problem? Is he flashing around titles and credentials as if that’s all I should need to know about him?

Be informed about the topics discussed. Read a book. E-mail Suze Orman (unless, it’s an insurance question – doesn’t appear to be her forte). Subscribe to the Motley Fool website. Talk to your parents or someone else savvy. If necessary, see a fee-based advisor for a second opinion.

Finally, do something! Rarely is the result of implementing mediocre advice worse than the consequences of inaction and procrastination. Also, do your business with the guy who devised your plan. He worked hard and deserves to get paid for it. If you choose to also visit a fee-based advisor, and he recommends something else, he’s earned his fee. Your original guy has still earned the right to implement any solution. And if you feel he’s done a good job for you, you also owe him the names and contact information of your closest dozen or so friends and relatives.