Parker - Working with a financial adviser

Tuesday, January 14, 2003

Would you trust your medical diagnosis to a casual acquaintance? Do you cut your own hair or dry clean your own clothes? For some services, it makes more sense to pay a professional who has the expertise to deliver the best results.

A professional financial adviser can help you build a sound estate plan, designed to help you reach your long-term planning goals. These six steps can help you locate and get the most out of this important relationship.

1. Choosing your financial adviser

One of the best ways to find a financial adviser is through a referral of a friend or relative. Your accountant or lawyer may also be able to provide you with a referral. Since they come with a recommendation from someone you trust, referrals can help you feel more confident about your choice of financial adviser. You can also find one by attending an investment seminar or reading the business section of your local newspaper.

2. Set up a consultation

Your first meeting is an opportunity to become acquainted with the adviser and find out if you feel comfortable working together. You should make sure a prospective adviser is a good match for your financial outlook and personality. Ask the adviser about the types of clients he or she is currently working with and try to evaluate if your financial objectives are well matched to their areas of expertise. Follow up with questions about education, experience, and qualifications. Before selecting an adviser, you should feel confident that a prospective adviser can accurately explain the financial arena and the benefits of different financial tools.

3. Discuss your goals and obligations

In order to help you clarify your financial goals, your financial adviser will need detailed information about you and your financial situation, philosophy and risk tolerance. Be candid about your income, debts, future obligations, current assets and anything else that may impact your financial situation.

4. Ask plenty of questions

The more you know about financial planning, the more control you have over your financial future. Use your adviser as a resource. They have access to current information that can help you better understand their recommendations and the performance of your plan. And if you don't understand something, make sure to ask.

5. Meet or speak regularly

Your financial adviser has the expertise and knowledge about planning, but won't be able to fully understand the details of your financial situation unless you share them. In order to keep your estate plan moving in the right direction your adviser needs up-to-date information on life changes that may have financial implications, including:

· Marriage or divorce.

· The birth or adoption of a child.

· The purchase of a home.

· A change in your work status, or that of your spouse.

· Additional current financial responsibilities, such as college payments or care for aging relatives.

· An inheritance or other financial windfall.

6. Listen

Professional advisers can draw from years of experience and help you maintain a long-term perspective on your investment plan through good markets and bad. You'll get more out of your relationship if you are open-minded about your adviser's recommendations. While you may not agree with every idea your adviser presents, being a good listener can help increase your investment knowledge.

Following these six steps can help you locate and have a successful relationship with a financial adviser.

Michael L. Parker, CFP, is a Certified Financial Planner practitioner in Sikeston with securities and advisery services offered through Lincoln Financial Advisors. He is a broker/dealer and registered investment adviser. (mparker50@aol.com)

Respond to this story

Posting a comment requires free registration: