Research, Common Sense to Find the Right Money Expert

by admin 16. July 2013 14:22

Should I consult a financial expert—and if so, when? I hear this question all of the time.

You wouldn't do your own open-heart surgery, would you? No, you would go to a cardiac surgeon. It is the same with money. We don't learn this stuff in school, or at least most of us didn't. Unfortunately, we usually learn as we go along (and we make too many mistakes along the way). I think it is OK to find an expert, such as a financial planner. But please make sure you use the same tools that you'd use to find a surgeon: research and common sense.

First, you need to make sure the "expert" has the requisite training and certifications. Second, ask for references. Do some digging; in this day and age it is so easy to get information about a person. If anything "smells funny," walk away. I don't care how many fancy suits or titles the person has; if something doesn't sit right with you, then find someone else. Have you heard of Bernie Madoff? If not, Google him ASAP.

Then, look into where the expert works and how she gets compensated. Do research about her firm and its reputation. Who pays the financial advisor? Is it only you? Or does the financial advisor get paid some other way as well? And, if so, does that affect her recommendations? Does the workplace encourage the financial advisor or planner to push the firm's products? You need to get some assurance that she isn’t influenced by the compensation system. For example, you need to know if a financial advisor who works at XYZ Financial Firm, Inc. gets more commission if you buy XYZ's mutual funds. It does not mean that those funds are bad, but you want to understand your advisor’s motivation. Make sure you understand the all of the fees. Feel free to ask the advisor questions. If she has nothing to hide, she will welcome the questions.

Make sure you understand the suggestions the "expert" is making. Her recommendations should make sense. We all know when you really understand something, you can explain it. Well, if the advisor can't explain it in a way that makes sense to you, walk away.

Last, there is no such thing as a sure thing. If something sounds too good to be true, it usually is. Make sure you do a gut check.  You work really hard for your money; make sure you take care of it.

Heidi Albert is a lawyer, a financial expert and the co-founder of School2life, which teaches students, recent graduates and young professionals how to transition confidently from campus to career. Heidi, who graduated from New York University School of Law, has worked in investment banking for Morgan Stanley and in institutional sales at Lehman Brothers. In 2003, Heidi followed her entrepreneurial dream and co-founded Dr. Bobby Skin Caring for Kids with a dermatologist. As CEO, Heidi grew the product into an established brand that was sold in more than 80 stores globally. Her column, aimed particularly at law students and young lawyers, appears on The Legal Balance once a month.


Heidi Albert | Let's Talk Money

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