Accountancy Resources
Most people know when they need help to solve one of life’s problems. Oh, they might pull out a plunger when the toilet backs up, or pop the hood and look at the engine when the car breaks down, or take a store-bought remedy or cook up chicken soup to try to heal themselves, but if they lack the skill to make a quick fix, they’re going to find someone to lend a hand.
And that makes sense with your plumbing or your car, because a bad repair job could damage or ruin one of your biggest assets.
Likewise, your good health is irreplaceable.
Yet, when it comes to finances which hopefully will be the biggest asset of your life, people are skittish, scared, and reluctant to seek out help.
Talking about money is still one of the biggest taboos in modern society, so people learn their lessons from parents, friends, and co-workers, at the barbershop or on the sidelines of the kids’ soccer games. They’ll watch television shows or listen to radio hosts, read articles, and try to cook up a portfolio or an investment strategy with help from all of those sources. A 2009 study by Sun Life Financial showed that one-third of Americans cited online or television news as a place where they turn for financial advice; that’s nearly the same percentage of people who cited financial advisors.
But finances and money are not like food, where failure to follow a recipe or simply using bad ingredients can leave a bad taste in your mouth. You can throw out a bad dish and forget about it by the time your next meal arrives, but bad financial mistakes will be with you for years, possibly as long as the rest of your life.
In the end, there comes a point typically when someone has amassed enough money that he can see the cost of mismanaging it when most people acknowledge that they could use some help, the kind of insight that will make them comfortable that their biggest decisions will turn outright.
That’s when one of two things happens: They jump on board with the first possible helper they find, or they put off looking for help, believing that it’s easier to find a mythical creature like a unicorn than it is to find someone who is smart, savvy, and worth the cost of their advisory fees.
Either they believe that the easiest way to amass a small fortune is to start with a big one and let a financial planner, insurance agent, banker, or broker lose it down, or they don’t believe anyone could turn their meager holdings into that small fortune.
Both sides are wrong because the expectations are wrong.
Go back to the basic need for help, the necessary fix to the plumbing or car. You want things fixed and running right, safe, and protected so that you can live your everyday life without worrying about a messy problem or a personal catastrophe. You don’t expect an auto mechanic to change your car from an American-made sedan into a Porsche or Lamborghini, you simply expect them to help you keep the car running properly so that you can reach your destination and make the journey to wherever you want to go.
That’s precisely why you should hire financial advisors, to help you make the journey from where you are to where you want to go.
At the very least, over the course of a lifetime, you will need to manage investments, amass college and retirement savings, secure and work out loans, buy or sell property, insure that home and your other possessions, protect your family and home against catastrophic losses, develop a plan to pass your life’s work to your heirs, and pay taxes on the whole thing.
Say hello to a broker or financial planner, banker, real estate agent, insurance agent, lawyer and/or estate planner, and a tax preparer or accountant.
Finding someone trustworthy who can do any or all of these jobs is not as hard as searching for a unicorn, but it’s also not as easy as handing your money to the next person you meet who purports to know something. That’s why you want to go about hiring financial advisors the right way, no matter which job they’ll do for you.
I’m always amazed that people spend more time researching a new flat-screen television or home computer than they spend checking into the background of the person who will determine a big chunk of their financial future. Presumably, no one fears offending the television by asking tough questions about it, whereas they are uncomfortable asking personal, prying questions to people they don’t know.
Just by reading this book, you are distinguishing yourself from that crowd and showing that you want to do the research and ask these types of questions. Good for you.
You’re about to learn that hiring good advisors is not an impossible task. You’ll be able to do a lot of research from home, on your computer, and the rest you can do by simply taking your time to get questions answered.
With that in mind, you should remember throughout the process of looking for advisors that you (and, hopefully, your spouse or life partner) are the only person you trust implicitly to have your best interests at heart. Everyone else must earn your trust, starting from scratch; no one gets a pass, no matter how much you love or trust the person who gave you a recommendation. If they can’t live up to the rigorous selection process described here, you either can’t trust them or they don’t deserve to work with your hard-earned money.
Start your search for any type of financial advisor by asking yourself a few simple questions.
If they can’t live up to the rigorous selection process described here, you either can’t trust them or they don’t deserve to work with your hard-earned money.
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