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Some so-called financial advisors refer to themselves as financial doctors. We expect much from our doctors. Many doctors are awesome. I credit my kids to my own fortunate second opinion. Hopefully you will benefit.
Financial Advisor- Solutions before advice
You go to the doctor’s office with a stomachache. The doctor says that he has come across this amazing medication that he wants to talk to you about. It has shown to help with mental alertness. You tell him your stomach hurts. The doctor tells you that he has done a lot of research on this mental alertness medication and he feels it would be a great solution for you to consider. He writes out a prescription and you start taking it.
After taking it, you feel more mentally alert but your ache persists. What if you found out that the doctor was not a general practitioner. In fact, the doctor is affiliated with a company that distributes mental alertness medication. In fact, he prescribes it to everyone he meets. What if the doctor generated a commission for prescribing the mental alertness medication. What if you found out that one of the side effects was a stomachache?
Financial Advisor- Advice before solutions
Now, even more sick, you decide to get a second opinion. The next doctor says not to worry about payment. They want to first determine if they can help you. When you meet the doctor, they ask you a series of questions, like family history, diet and exercise, etc. During this initial consultation the doctor does an overall wellness check. You share that some other items have been bugging you but you’ve learned to live with them. You also learn about some things that you didn’t even know you concern you. Now that you feel comfortable that this doctor can help you, you want to move forward.
The doctor says I feel that I can help you, but I need some more information before I can determine a course of care. The doctor sends you home with a checklist of information to gather together and bring with you to the next consultation. Between your first and second meeting with the doctor you receive a letter or email summarizing your prior consultation.
Are you feeling more mentally alert from the attentive bedside manner? You show up to next meeting with all of the information and medications you are taking from previous “financial doctors”. While discussing your information, you realize there is a high probability that your stomachache is being caused by some of your other health issues. The doctor then presents their diagnostic process. It is intended to not only address your stomachache, but improve your overall wealth care. After you’re feeling better, she will monitor your health on an ongoing basis, to make sure you maintain this new level of wellness. You’ve admitted to backsliding in the past. This process won’t let you fall too far down. Now how do you feel? Maybe the stomachache was caused by the nerves of your poor financial health.
Financial Advisor- Where’s the catch?
How do you pay? While there is no third-party, wealth insurance, the doctor indicates that you will pay for this service by paying a fee based on all the information you have supplied. If you need prescriptions you can either buy them from the doctor or you can shop around and buy them elsewhere. The doctor feels that the most important part is for you to understand why you need the service.
Did you really want to say financial planner that is accredited?
So why haven’t you found this financial advisor yet? Historically the industry has been driven by financial services product manufacturers. Likely a few come to mind. While many people use the term financial advisor, many are actually recommending you buy what they have in inventory and not advising you on your options. What I have explained here requires you to work with someone that can be compensated for advice only. That means that the financial advisor must hold the registration to charge a fee. You can still buy commissioned based financial services from your current broker(s) once the “financial planner” determines the prescription. I recommend using a financial planner that has an accredited designation , such as a CERTIFIED FINANCIAL PLANNER™ professional.