FAQs
How can you find the right financial advisor for you?
While much is written about choosing the right investment, very little is written about choosing the right financial advisor. And yet an advisor can have a much greater impact than any single investment choice. If you were interviewing a potential advisor, how would you go about selecting that person?
Based on our experience as financial advisors, we’ve developed a list of questions to help you select a financial advisor who is best suited to your needs.
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What you want to hear is that you are similar to the majority of clients they work with. You do not want to hear that they work with all different types of people.
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Professional designations are important, but they must be meaningful. The CERTIFIED FINANCIAL PLANNER® certification generally takes at least two years to obtain, has about a 50-percent pass rate, and cannot be used until the advisor has two years of work experience. Other designations may sound impressive but can be earned by going to a two-or three-day class in Las Vegas and taking a test where the answers are already provided. They may be worthwhile classes to attend, but anyone can get the qualification. So beware of relying too heavily on the amount of letters behind an advisor's name. The “quality” of the letters is what matters, not the quantity.
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How this question is answered is often more telling than the answer itself. The advisor should be able to communicate to you in a straightforward way how they are compensated for giving advice. Do not expect a “rate quote” at this time though. It will be too early to settle on a fee-structure or rate at this time. Is there a “better” way for advisors to be compensated? If you ask a fee-only planner, he or she will say fees. If you ask a commission-oriented advisor, he or she will say commissions. Other advisors are able to charge either fees or commission, depending on the circumstance of the client. The goal is to be sure that the advisor's compensation closely matches the client's advice and service needs.
Generally, commission-based salespeople are compensated when money is in “motion.” Many of their recommendations will be based on activity. This may or may not be in your best interest. If you want an ongoing relationship with your advisor, fee-based has the advantage of being a more “pay as you go” structure. Another advantage is the ability to “try out” the fee-based advisor without paying 4 percent or 5 percent to find out if he or she is right for you. But over time you may actually pay more under a fee-based relationship. You need to find the advisor that will give you the best combination of price and service for your situation.
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Experience does matter. You want an advisor with experience helping clients like you. You may be better off working with an advisor who is 35 with 10 years of experience vs. an advisor who is 49 years old and just starting out. Experience will also help you to identify what type of advice you are most likely to receive. If the advisor spent the majority of his or her time in investment management and stock picking, it stands to reason that is where the advisor is going to concentrate. If you want someone who is going to take an overall approach to your financial situation, he or she would ideally have experience with investments, tax planning, insurance, and estate planning.
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This will show you what the advisor believes they can add the most value. Does he solve problems? Does she use creative thinking? Does he focus on issues within his control? Does she focus on successful behaviors? The answer given should closely match the issues that you are concerned with. A great answer is one that matters to you, not one that the advisor gets excited about. Be leery of a focus on performance of investments.
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This one will often put the advisor on the spot. He or she will have to communicate if there is anything special about him- or herself. Again, this is an opportunity to see if what the advisor provides matches what you need. Look for self-assurance and an ability to communicate value to you. Be leery of self-centered cockiness (there is lots of it in the financial services industry). But beware of a lack of self-confidence, as this may signal inexperience or doubt in his or her own ability.
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The important thing is that your advisor has an effective plan in place so that you do not experience service issues in case of the unforeseen. Does he or she have a database and documentation plan in place so that the successor advisor can step in and help without forcing you to “retrain” the replacement on all of the issues that are important to you and your family?
One final note:
Be careful not to make your decision based on emotions and sales techniques. If you have a feeling in the pit of your stomach and feel uncertain, you need to take more time. By simply telling the advisor you need more time you will learn more about the advisor. If he has your best interest at heart, he will honor your request. If she applies pressure, gets upset, tries to scare you, or pull back the offer you should be concerned. Use the scorecard technique we outlined to help you make a great decision.
Reasons to consider a complimentary first meeting.
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How do you balance today's financial needs while preparing for your future? Are you unsure if you are making the financial progress you should? Do you feel you spend your money on what is most important to you? Do you worry that you might be "missing something? "Do you have a plan to safely withdraw money from your investments once you retire?
The Bucholtz & Germo financial planning process can help you answer these important questions and build your financial confidence.
We use methods developed from our more than 20 years of experience working with successful pre-retirees and retirees. Our financial planning process is the foundation for our planning and wealth management relationship. Our process will:
- Discover, document, and track progress towards your most important financial goals.
- Provide a “Financial Snapshot” to track your progress over time.
- Use proactive tax planning to lower your tax bill and keep more of your money.
- Build your customized Retirement Income Plan to bring together all of your investments, Social Security benefits, pension plans, and 401k or other retirement plans to give you a monthly income estimate for your retirement.
- Evaluate how to get the most from your Social Security and available pension benefits.
- Identify ways to save automatically and regularly in the smartest way possible.
- Plan to eliminate or reduce your debt.
- Review and explain your investments so you understand what you own.
- Evaluate the strengths and weaknesses of your investment plan (including costs and fees) and recommend any changes.
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When was the last time you or a tax professional looked for opportunities to lower your tax bill? Unfortunately, most Americans simply take their tax forms to their tax preparer or buy a copy of Turbotax and mindlessly record what happened during the year. And then they file their taxes, all the time wishing they were able to keep more of their hard-earned money. This happens year after year! Wash, rinse, repeat. Little thought is given to the actions people can take to lower their tax bill now and in the future. Sound familiar?
But what if there was a way to plan for and maybe even lower your taxes? Here is the process we follow to put our clients on better financial footing:
Use proactive planning.
- Unfortunately, by the time taxes are filed, most of the tax liability is set in stone. There are still a few opportunities to reduce taxes, but many of the opportunities will have already passed you by. This is why it is important to plan ahead.
- Knowledge is power. Knowing how the tax system works and what you are paying on your last dollar of income can help you make better decisions. Should you have a regular IRA or Roth IRA? 401K or Roth 401K? Should I pay extra on my car loan or my mortgage? Did you know that you pay 10% Federal Tax on your first dollars of income, then 12% on your next dollars, but then it jumps to 22%?
Understand your tax bracket and use it to help you make decisions.
Plan for your tax future! You may be able to take a few steps today to reduce your tax liability in the future. Here are just a few of the techniques we may employ to help you win the Tax Tug of War:
- Using a little-known way to make you eligible for a Roth IRA.
- Using depreciation as your friend during high income years.
- College funding options (even if your children are already in college!).
- Own a business? Lots of opportunity!
We believe clients benefit when they have a knowledgeable team of professionals working together without conflicts and with the clients’ best interest at heart. By working together with tax professionals, attorneys, and other specialists, we are able to provide better solutions. Each professional is encouraged to ask questions of each other to make certain we are providing a great solution for the client.
*Bucholtz & Germo does not provide tax advice. You should consult a tax professional regarding your individual situation.
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Are you recently married or divorced? Have you lost a loved one? There are a number of life changing events that can turn your world upside down. It can be a time of confusion and uncertainty, happiness or sadness.
When ‘life’ happens, you will get plenty of advice from family and friends, but objective, professional advice can avoid missteps. It is likely you have never experienced the situation before, and during transitions, the decisions you make can impact your life for years to come.
Getting married or recently married? Congratulations! Have you discussed how you will handle your finances now that you are one household? Perhaps you have a new baby in your family. Do you have children from a previous marriage? Are there special financial considerations to address? Start out on the right financial footing for your future together. We can help you make a spending plan, design a plan to reduce debt or make sure your new family is protected.
If you are in the middle of a divorce (or think that is where you are headed), learn what you can do to financially protect yourself and your children. It is important to negotiate from a place of strength, and you do that with knowledge. We have helped many people in this situation by preparing them early in the process to understand what they have so they can negotiate for a fair share. Don’t wait until the ink is dry on the divorce decree, take action to preserve your options.
Some transitions are forced upon us with the loss of a spouse. On top of the emotional heartache from losing your life partner, many financial decisions must be made. Paperwork is the least of your concerns. Having a knowledgeable and caring resource to help you through this difficult time can be reassuring. Let Bucholtz & Germo carry some of the burden for you.
Emotionally charged decisions don’t often end well. You can avoid costly mistakes by choosing a well-constructed plan from the start. Helping our clients choose the right path forward during transitions is a specialty of Bucholtz & Germo. We will share our experience to help you through your transition. Our process looks at all the financial components for the ‘big picture’ and we design a plan that is unique to our clients’ needs.
Begin your journey to confidence.
Making smart financial decisions can be difficult. Getting sound guidance doesn’t need to be. Learn more about Bucholtz & Germo by taking advantage of our complimentary first meeting.