Thanks to working at my “traditional” job for 11 years that included a dollar for dollar match on my retirement contributions after 5 years of service, I have a nice 6 figure retirement account. However, I left that job 1.5 years and the money is still just sitting there with my old employer. The problem? I can’t find a financial planner I trust, especially since that is currently our only retirement savings.
Adviser 1–In It for The Money
I first met with a financial adviser at our credit union to discuss transferring the money into my own IRA. This is important because my retirement is currently part of the state’s retirement fund. Unfortunately, in the state I live in, the higher officials have been siphoning money from the state pension fund and can’t agree on how to replace the money. If I don’t move the money soon, I am worried it won’t be there!
This adviser highly recommended an annuity even though I am still fairly young. He promised it was a safe investment that would give me money every month. The problem? I would only get about $1,000 a month 30 years from now when I retire. After inflation 30 years from now, $1000 doesn’t sound like such a good guarantee. A bit of probing helped me determine that the adviser works on commission and makes the biggest commission selling annuities.
Moving on, thank you.
Adviser 2–Helpful but Too Busy
Next, I turned to my accountant’s firm. Her husband is a Dave Ramsey trained financial adviser. This sounded perfect, and when my husband and I talked to him over the phone one night this past summer, he asked all of the right questions and seemed to have our best interests in mind. He took the time to ask where we were financially right now as well as where we would like to be. He recommended some investments, and we planned to talk in about 4 weeks to start the paperwork to move my retirement.
The problem? We haven’t talked to him since. I have left some messages for him; he has left some for me, but over the months, we have just played phone tag. I last called in early December because I wanted this whole issue resolved before 2013 began. We are well into 2013, and I still haven’t heard back from him.
Adviser 3–A Keeper?
When my cousin casually mentioned her financial adviser at Christmas, I pounced on her. Who was he? Would she recommend him? Does he get back to her quickly?
She raved about him and said he was attentive and that the investments he chose were making them good money. She gave me his number, and next week he is on my list of people to call.
When I quit my job 1.5 years ago, I would have never guessed finding a good financial adviser is so difficult. I feel like I am back on the dating scene again trying to find just the right match.
Is my experience unique, or have you, too, had trouble finding a financial adviser to work with? What did you look for in a financial adviser?
img credit:Brad Montgomery on Flickr.
Melissa is a writer and virtual assistant. She earned her Master’s from Southern Illinois University, and her Bachelor’s in English from the University of Michigan. When she’s not working, you can find her homeschooling her kids, reading a good book, or cooking. She resides in New York, where she loves the natural beauty of the area.
Roger @ The Chicago Financial Planner says
Your plight is all too common unfortunately. As a fee-only financial advisor I will offer my biased opinion. First find someone who is fee-only (not fee-based as this is a hybrid of the commission model). There are a number of fee-only advisors who work on an hourly basis if that fits one’s situation. NAPFA (the largest fee-only organization of which I’m a member) has a find an advisor link on their site (napfa.org) as well as a a link to an excellent and detailed guide to finding and an advisor. The Garret Network is another group of fee-only advisors who specialize in hourly and as needed advice. There is a fair amount of membership overlap between these groups. Lastly I’ve written a number of articles on my blog about financial advisors, you can click on the Financial Advisors link in the category section. Good luck.
William @ Drop Dead Money says
Melissa, might I suggest the best financial planner — you! Nobody knows your situation like yourself, and NOBODY cares as much about your performance as yourself. As you pointed out, “other people” are out in one way or another, to make money for themselves. That’s a conflict of interest. (If you read Warren Buffett’s biography, you’ll see he started out as something like an financial adviser, but the conflict of interest killed him, and so he gave it up for that very reason.)
If you can buy food and clothes and (gasp) a car and a house, you know how to buy investment assets. Don’t sell yourself short. All you need is a little knowledge. It’s not rocket science.
If you think you’re incompetent to be your own financial planner, let me know — I can show you you’re a lot more qualified than you might think.
Sadly I am not surprised. The good ones probably already have a pretty full clientele and there.will always be the shady ones looking out for themselves. Once you get a good one hold onto them!
I’m sorry to read about the challenges you’ve faced in finding a financial planner to work with that you can trust. Unfortunately, this is something I have heard far too often.
Here is a great resource for consumers to conduct due-diligence on financial advisors and planners: http://www.BrightScope.com
BrightScope has access to unmatched data on financial advisors and planners, including an advisor’s years of experience in the industry, their prior work experience, and any misconduct logged against them. You can even ask your financial questions and get answers from experts, FOR FREE.
Best of luck finding an advisor or planner that fits your criteria; there are so many shapes and sizes of “financial advice”, it is absolutely critical that you do your due diligence on the experts you choose to work with!
I would have converted my 401K immediately and make my decision about a planner later. You could pick the same choices you had before as a stop gap. I do not have a planner and have spent years learning about investing.
Roger @ The Chicago Financial Planner says
@William As a financial advisor I freely admit that I do this for the money, my kids have this funny habit of wanting to attend college and eat. Most people do their jobs for compensation as well including you I’m sure. I’m also all for folks who have the interest and the knowledge to do their own investing, in fact I’ve turned prospective clients away and told them that I’m not sure what I would do that they aren’t already doing themselves. But that is not everyone. Saying that honest, competent financial advisors are not worth their fee is just silly. While sadly there are many advisors who have major conflicts of interest (I write about them with some regularity on my blog including today’s post) for folks who need our help our services are well worth the cost. I’ve helped clients create and preserve a great deal of wealth over the course of my career. I am not ashamed to charge the fees I charge and am quite comfortable that I have earned those fees many times over!!!
Jon @ MoneySmartGuides says
@Roger:I agree with you. Many people think that financial advisors are only there to help with investing. This is the smallest part of the job. A good financial planner looks at your entire financial life: invesmtents, insurance, estate, taxes as well as your goals and where you want to be financially one day. I will say there are some bad apples out there, but you can say that about any industry. The value add from a competent financial planner isn’t the investments they chose, it’s the planning they provide so that you are ready for anything that comes your way.
Roger @ The Chicago Financial Planner says
@Jon, how much do I owe you for the new marketing copy you just provided LOL? Seriously you are totally correct. Even on the investing side as much of what I do involves client behavior, keeping them “in the game” even when the waters are rough. Thanks for your comment, much appreciated. This will be reinforced in spades when I meet with my study group of fellow NAPFA fee-only advisors next week.
shanendoah@The Dog Ate My Wallet says
I think it can be hard to find a good “whatever” when what you are looking at is someone who is going to become intimately involved in your financial life. It can be hard to find a good accountant, or insurance broker, etc.
I do tend to start by asking friends in the area if there is someone they can recommend. Though in our case, when we need financial planning advice (probably in the next year or so), our insurance broker, who we already have an excellent relationship with, is also a financial adviser, so we’ll likely go with him.
I hope you find someone soon. Having your money just sitting there must be stressful
I’m sorry to read about the challenges you’ve faced in finding a financial planner to work with that you can trust.
Do let us know in case you find some solution for the same.