So much information is flung at us from 10,000 feet about investing, insurance, and retirement.  How do we begin to make sense of it all? The path of least resistance is to pursue our passions and leave this subject for another day.

As savvy women, we know this path is not preferred, but how to begin?

By now you have acquired some assets and as time moves on, life has gained more complexity.  Financial advisors bring an expert and outside view of your finances by helping to navigate complex situations like paying down debt, taxes, investments and estate planning.

One important concept to understand is the difference in standards between a “fiduciary” and a “broker-dealer or private wealth advisor”.  Both of these term apply to financial advisors, but the work they do is distinctly different.

A “broker-dealer” is commonly known as an investment bank with a private wealth division.  Their model or approach to the investment and advisory process is formulaic and full of conflicts of interest.  The advisor is captive to the model and incentivized to earn as much revenue/commissions from your assets as possible.  The advisor offers what is 

“suitable” rather than what is “in your best interests”.  Often when I complete account reviews, I find these portfolios on auto-pilot and full of high fee based assets.

If your accounts are currently invested with a broker dealer, ask them this simple question:  “Please provide me with a full accounting of all the fees earned from my account year to date on your company letterhead.” 

I guarantee you they cannot provide this information.  

A fiduciary advisor is independent of an investment bank.  They are bound by regulators to always operate in your best interests.  They do not earn commissions from your investments, but are paid a percentage of your assets under their management.  If they sell you a commission based product, such as insurance or annuities, the commission is disclosed. Their incentive is to grow your wealth as much as possible given your requirements and guidelines.  That may sound similar, but it’s not. Commission is like candy to a child. If you remove the candy, the child will be healthier.

The good news is that the rise of the independent fiduciary advisor has changed the industry for the better.  Fees have come down and new products have entered the investment universe that are low cost as well. If you want to sleep at night knowing your investments are looked after and  that a proper plan is in place for the future, then you should seek out this type of advisor.

Here is what to expect:

  • A comprehensive data-gathering exercise to determine your whole financial picture.
  • A conversation about your needs, wants and goals to provide objectives.
  • A discussion of risk tolerance and product balance.
  • Assistance with tax planning, insurance coverage and estate planning.
  • Expert investment management with regular communication and reporting.

How do you choose from the array of offerings out there?  Here are 10 questions to pose to a financial advisor you are considering working with:

  1. Are you a fiduciary?  This is the preferable standard.  They act in your “best interests” rather than providing you with just what is “suitable”.

  1. How do you get paid?  Focus on fee-only advisors – either as a percentage of your assets they manage, a flat fee or an hourly fee.

  1. What are my all-in costs?  In addition to paying the advisor, you’ll want to know if the products they use will erode your investments.  Mutual fund products have additional fees that are deducted without appearing on your statement.

  1. What are your qualifications?  Financial professionals have a dizzying array of initials behind their names. The Financial Industry Authority’s Professional Designations Database will tell you what they mean.  You can also see if there are any prior disciplinary actions against a particular advisor.  In addition, you can view an advisor’s form ADV at

  1. How will our relationship work?  How much access will you have to the advisor?

  1. What’s your investment philosophy?  You want to believe in what they are doing.

  1. What asset allocation will you use?  Your asset allocation is the key to creating diversified portfolios that will drive positive returns.  

  1. What benchmarks do you use?  Advisors should either use benchmarks that relate to them or explain why they don’t.

  1. Who is your custodian?  Ideally your financial advisor has hired an independent custodian to hold your investments rather than doing it on their own – as in Bernie Madoff.

  1. What tax hit do I face it I invest with you?  You want to ensure that your advisor has your tax interests in mind when managing your money.  No one wants to get a big tax bill at the end of the year. (This happened to a lot of people at the end of 2018 despite the market being down on the year).

If this process makes you feel apprehensive, think of it as a job interview.  You can interview people for jobs; this is the same thing. You want to build a rapport with this person and its important to find a good fit.  Remember, you are hiring someone to bring clarity and simplification to your financial life, not complexity. If you get complexity, find a different advisor.  Ask a friend or colleague for names. Everyone likes to share a good resource.