You Say Financial Advisors We Like Financial Advocates

Shopping For Financial Advocates

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When it comes to choosing the right financial coach to guide you and help you look after your investments, the best advocate you can find is you.

Maybe you’re wondering what special gifts you can bring to the investment table. Well, you’d be surprised. To begin with, by having read this far, you’ve already examined your lifestyle, your spending plan, and your income, and you’ve thought long and hard about your relationship to money—how it has helped you and how it may have hindered you. Furthermore, you’ve thought about how you want to live in the future and what types of investments you’ll need in your Money Machine. In short, you— more than anyone else—know the realities of your present and future situation. And after reading the preceding chapters, you understand what your investment options are and which ones will best nourish the lifestyle you desire.

Congratulations!—standing ovation for you.

You still may not know everything you need to know in order to make your Money Machine run silky smooth, but you know enough to recognize the things that work and those that don’t—and to set some standards. You’ll need to hold yourself accountable for the results, too, and be flexible and nurturing when one approach or another doesn’t satisfy your goal. That’s something we intuitively and instinctively know as women, and that’s the simple beauty of it. It does take courage to build a financial future, but if you don’t actively participate, you’ll be off to a false start—you’ll be heading east looking for a sunset!

On the other hand, if you jump right in and take an active role, you’ll be the best financial advocate you’ve ever had. Using the intuition you were born with, your knowledge of yourself and your dreams, and your growing understanding of how money works, you’ll be positioned to structure your financial future. You’ll know how to choose some good stocks or mutual funds, how to regularly invest in them, and how to monitor the results to determine how well your money is growing. You’ll be able to measure your financial growth just as you are able to measure and encourage the growth of, say, your children or business. You’ll be your best advocate.

Notice that I’ve been using the word “advocate.” It’s an unusual word in the investment world—you don’t often hear brokers or advisers referred to as “advocates” for their clients. When I worked on Wall Street, I encountered brokers and so-called advisers who were caught up in a highly competitive and adversarial spin. It was “may the best man win,” as if they were slamming through a game of hockey—using your money as the puck skidding across the ice. I heard brokers intentionally give misinformation, push investments for purposes other than the client’s best interest, deliberately confuse clients in order to maintain control over their money, and work for their own self-interest far above anyone else’s. This is not the behavior of an honest advocate, nor of anyone you would want to plug into one of those important spokes in your Wheel of Life.

Your Financial Well Being No Game

women drinking coffee and talking at restaurant

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Your financial well being is not a game, and the idea isn’t to align yourself with someone whose objective is to make more cash than the gal or guy at the next desk. As a consumer, you want and deserve something better. Many women—and men, too—have smartly avoided the brokerage and financial community because its typical way of doing business just doesn’t feel right. That means we turn elsewhere. One approach is to try to eliminate middlemen, such as brokers, and to handle all investment decisions, even the details of buying and selling investments, on your own.

Not so long ago, this was virtually impossible, but the information revolution is changing that financial advocatespicture. As we have said, some of the on-line computer services offer you the opportunity to “sign on,” open a brokerage account and get started with your investments—with only a few strokes on the keyboard. Also, some companies offer no-load stocks or mutual funds. This allows individual investors, like you, to buy shares directly from the issuing company. This means you don’t have to use an outside broker or pay any fees for the trade. Going directly to the company—Exxon, Mobil, Chevron Corporation, and Occidental Petroleum are among the corporations that offer no-load stocks—cuts out the middleman.

Many investors feel, however, that they need more direction. If you want advice and investment ideas, or want simply to obtain better results than you are getting on your own, then it’s time to choose an advocate.

A suggestion is that you can also start with a course such as the Master Wealth Creator Course.  I am a coach in this program and I walk students through a year long program that teaches the foundational aspects of being financially fit.  You can learn about this course by going to agirlneeds.com, where you will find my blog and can talk with me. 

The More You Educate Yourself The Better Relationship You’ll Have With Your Advocate

Now with the confidence that you’ve gained and the knowledge to be discerning, here’s how you can work with an advocate successfully.

What do you want in an advocate? Very simply, a person who works with you to develop the best possible strategies for your personal financial needs; you want someone who gets results that build your Money Machine. This advocate may be a broker or financial adviser who has achieved measurable results on her or his own. Underline measurable results, because you don’t want to adopt the strategies and beliefs of someone who is also heading east looking for a sunset! You want to select an advocate who is mature and responsible for her or his own financial well-being, because this individual will essentially be applying the same approach on your behalf.

The aim is to find someone who can work with you. Finding the right financial advocate can be very much like finding the perfect personal trainer—someone who is compassionate and courteous, someone you can respect because she or he is knowledgeable, someone who has standards and strategies you can embrace. Equally important, you want a person who looks out for your growth and development. You don’t want someone who is just around to collect her or his fee for a workout session. In short, you want someone who will champion your cause and do everything possible—including expanding her or his knowledge—to advance your financial goals.

Although you may create and manage your Money Machine on your own, in my experience, an essential key to jump-starting your Money Machine is to partner with an advocate. You won’t turn over your money to this person without understanding and agreeing with her or his financial advice, any more than you’d turn over your body to a physician without understanding and agreeing with the doctor’s diagnosis and recommendations. But you can greatly benefit from having an advocate who knows the investment world, who regularly tracks the investment markets, who acknowledges your goals, and who helps you develop realistic plans for achieving them.

As in any partnership, you’ll reap more success with someone with whom you can easily communicate. Above all, you must choose an advocate who listens to you and whom you can trust. I’m not talking about someone who tells you that you can trust her or him—we’ve all heard the “lie down, I think I love you” line from the guy who’s on the make! I mean someone who demonstrates that she or he is trustworthy. Always keep in mind: The financial results you achieve are not going to be your advocate’s results. They’re going to be your results—your financial future.

Shopping for an Advocate

Unfortunately, because there are unscrupulous brokers, financial firms whose policies are designed to protect the company rather than the investor, and financial advisers whose recommendations are ill informed and sometimes self-serving, looking for a good financial advocate can be like tiptoeing through a minefield. Here is a road map with some important benchmarks that can help get you safely through:

  • Before you begin your search, ask for referrals from friends and associates you respect. Look for specific examples about how the person they recommend has been a good coach. This way, you’ll avoid being referred to an adviser who is simply someone’s brother, tennis buddy, or bowling partner.
  • Evaluate your adviser using the same criteria you’d use in any other personal or professional relationship: Do you feel this person is honest, open, and accessible? Can you communicate easily with each other? If you dread calling your adviser because you’re uncomfortable talking with her or him, some crucial conversations may never take place—and that can cost you money.
  • Take time to shop around. You wouldn’t buy the first house you see from the first real estate broker you visit; you probably wouldn’t buy the first tomato you see when you shop at the market! Choose an advocate the same way. It never hurts to take another look to see who else is waiting to work with you.
  • When you find someone you’re interested in, be bold: Ask the person directly whether she or he will be working in your best interest. Then check in with your stomach in order to see whether you get a good feeling about the response. What’s this person’s mission or agenda? Everyone has one.
  • You want someone who will help you track the growth of your Money Machine. Ask whether she or he will review your investment progress with you about every three months in order to help you assess any changes that need to be made.
  • Ask for information that will help you evaluate whether your prospective advocate is nurturing the growth of her or his own financial well-being. Is she or he in or out of balance financially?
  • Make sure your prospective advocate follows her or his own financial advice. You can determine this by directly asking your prospective advocate about her or his personal investments. You can also ask the firm for a history of the investments she or he has championed over the past few years and their track record.
  • Even if you have a good feeling about someone, check out that person’s track record within the industry. Approach it the way you’d approach a doctor’s recommendation for minor surgery: Not only would you get a second, and sometimes a third opinion, but you also might call your state medical board to make sure you don’t get a doctor who will cut off your foot if all you need is a nose job. To check out a broker, call the FINRA – Financial Industry Regulatory (www.finra.org) and find out whether any complaints have been made against the person you have in mind. FINRA is a self-regulatory organization that encompasses all of the securities brokers in the United States. Check the website for the North American Securities Administrators Association (www.nasaa.org) who will put you in touch with your state regulator, who can tell you whether a securities broker or financial adviser has been subject to any disciplinary action. Call the Northern American Securities Administrators Association in Washington, D.C. and ask whether the adviser’s firm is covered by the Securities Investor Protection Corporation (SIPC) (Website:  www.sipc.org), which provides insurance against a broker’s or a firm’s failure.
  • Run, don’t walk, from any broker you’ve never met who calls you at home or in your office to sell you something.  Like any other telephone solicitation, these “cold calls” are a hotbed of fraud and consumer abuse. Don’t bite!
  • Explore your prospective advocate’s investment perspective to see whether it matches your beliefs. For example, you will probably not want someone who will want to trade the securities in your portfolio often, because you plan to be a long-term investor. And you want someone who is focused on the stock market—not bonds—because, as you’ve seen, stocks are the best way to build your wealth.
  • Avoid any broker or adviser who appears condescending or disrespectful. To this day, Wall Street is filled with brokers who maintain stereotypes about women and money. Don’t use a broker who acts as if he “knows better” what sort of investments are right for you, or one who tries to steer you toward investments that “women like.”
  • Above all, you don’t want someone who tries to incite you into the “fear and greed” syndrome—someone who tells you what’s hot so you buy it, and then talks you into selling it when it “cools off.” This approach will only lead you to make out-of-balance and costly decisions. You’ll want to sidestep that giant stomachache.

Once you know whom you want to consider, you’re ready to interview your potential adviser to see whether this is a person with character and integrity with whom you can work and have a productive professional relationship. It’s better to have this talk face-to-face rather than over the phone, if possible. This allows more intimacy, and it permits you to monitor more easily how someone is responding to you. Also, face-to-face meetings often reveal more about someone’s personality, professional style, and point of view. And always remember, trust your gut. Whatever feeling you get in your belly about your prospective advocate is a true feeling, and it will signal how you will feel about working with this person into the future.

Before my first marriage, I forgot to ask the important, intimate questions about my fiancé’s deep-seated values, dreams, and desires. I was much more concerned about superficial considerations: how physically attractive he was, whether or not he went to an Ivy League school, and whether he came from a “good” family. I learned the hard way that the more intimate questions were the important ones, and because I’d failed to probe them before entering deeply into a relationship, I suffered needlessly.

The same is true when you consider a relationship with a financial advocate. Less important is whether she or he works for one of the Big Five brokerage houses, or whether her or his office has $50,000 worth of carpeting, $100,000 paintings hanging on the wall, and a $20,000 desk adorned with rare stone sculptures from China. Nor does it matter whether your adviser has a Harvard, Stanford, or Northwestern University MBA. Most important are the intimate details that reveal whether this person will have a good one-on-one relationship with you.

Being an Informed Investor

   Remember—when two people meet: One with Money and One with Knowledge.  When they part, the One with the Money will have the Knowledge, and the One with the Knowledge will have the Money.”  This is a saying that I heard in the investment community many many years ago and have never forgotten.  I carry it with me as a trusted and true companion, to remind me to be knowledge in all financial ways.  It’s gold—keep it with you too!  And carry it with you when you meet with your advocate.

     Once you’ve connected with someone to handle your investments, you don’t want to be a forgotten soul. That means you need to know what sort of contact you can expect from your advocate, and how available she or he will be to you. Will your advocate pick up the phone when you call or call you back within a reasonable amount of time? If not, will she or he have an assistant who will be fully familiar with your situation, and who will be available for you to talk to? Ask these questions before you finally choose an advocate. Better yet, call your advocate’s office several times to see for yourself what kind of response you get.

Clear, frequent written communication is equally important if you are to be an informed investor. How often will your advocate send you an update of your account activities? If you don’t understand something on your statement, or if you need more information, will your advocate readily supply it? And will that statement be easy to read and understand?

I’ve seen statements of accounts from various firms that even someone with an MBA and lots of years in the investment business can’t decipher. Being comfortable with the information on statements that you receive from your advocate is fundamental. If you can’t read them, you can’t know how your money is doing. You’ll want to be certain that your advocate will fully explain this information and other technical jargon and machinations of the investment world in language that doesn’t intimidate or patronize you.

     Make sure that your advocate explains the Capital Gains and Losses Report that should be found in your monthly statement, as well as clarity about your monthly statement.   This report is an investment record that indicates the purchase date of the securities in your  account, their purchase price, and their current value as of the statement date. Your entire investment history is before you, so you don’t have to shuffle through files to figure out where you’ve been and where you are now. This will be the first place you’ll go each month to see how much your portfolio has gained (and hopefully not lost).

financial advocates and Capital Gains Tax

You also want to know how your advocate keeps up with the ever-changing investment world. What does she or he do to remain current about the financial industry and to stay on top of the cutting-edge approaches to growing your money? When you ask about this, you’ll want a response that shows you that this person is doing more than just selling the particular products that her or his firm promotes. (You can be sure that the firm will promote the products that are most lucrative for it to sell. After all, it is a business.)  Your advocate should be there to work on your behalf, to talk to you about investments that personally suit you, and to effectively serve you. To do this, your advocate must continually educate herself or himself.

Joan Perry is the publisher of www.WomensWealth.money, the national authority site for women and money. She is a Best Selling Author of ‘A Girl Needs Cash’, Random House; and Living Proof, Celebrating the Gifts that Came Wrapped in Sandpaper (co-authored with Lisa Nichols). Joan is also the creator of The Women’s Wealth Model, A Heroine’s Journey to True Wealth,. As a pioneer in the field of women’s wealth, she founded the first female-owned investment banking firm that underwrote and traded municipal bonds for major governmental entities. Now as a women’s wealth advocate, she serves as a teacher, coach, writer and speaker.

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