With two children, one in the oven, and a new mortgage breathing down our backs, my husband and I were more than nervous about our financial situation a decade ago. A couple bad personal financial planners left us doubtful that there were any decent, honest people out there who could give us good advice about our college plans and retirement.
Our first financial manager was more like a used car salesman, placing supreme importance on his commission and his hypnotically colorful pie charts. Our second consultant was knowledgeable, but could not hide his secret life as a regular customer of the local escort services.
Third time’s a charm, they say, but we were skeptical about finding Mr. Right after meeting Mr. Cheeseball and Mr. Pervert.
Waiting in the lobby of our third financial guy’s office, we wondered if he might be in the witness protection program or on parole for a double murder. A receptionist brought us Styrofoam cups of coffee and led us to an office filled with family photos, basketball trophies, and children’s artwork. As we waited for the new guy, we wondered if the poor family in the photos knew that their husband/father was really a hit man for the mob.
After a few minutes, our new financial manager walked into the room with a folder under one arm and a “World’s Greatest Dad” coffee cup in the other. He was a tall, wore glasses, and had a warm smile. We imagined the horror that the tellers must’ve experienced at gunpoint when he robbed all those banks out in the Midwest.
Our new guy introduced himself as Russell, and we started to talk.
Regardless of our complete cynicism about him, we knew we would hand over our life savings, just like we did with The Cheeseballand The Pervert, and allow him to invest it for us. But this time, things would be different. Sure we’ll give you every penny we’ve got, but we’ll never trust you.
At our fourth or fifth meeting, Russell was so exasperated with our suspicions, he slumped into his chair, put his hands over his eyes and said, “Do you have any idea how little money I make from your account?” Dropping his hands onto his lap, he said, “Exactly eleven dollars and seventy-five cents a month.”
Slowly but surely, Russell won our trust. He and his family lived nearby, and we ran into them all at school functions and community events. He chatted with my husband and I at a Cub Scout meeting one night, wearing a large dried-up splotch of spaghetti sauce on his chin. We didn’t have the heart to tell him about it. To us, the spaghetti sauce represented Russell’s private life and showed us that, perhaps, he had nothing to hide.
As our friend and financial advisor, Russell felt comfortable being completely blunt with us. It was refreshing, but on one particular occasion, his straight-talking style went a little too far.
He called us in for an annual review and to tell us about a couple new life insurance options. As usual, we were totally confused, and Russell struggled to make the concepts clear to us. As he often did, he used a personal hypothetical to explain.
“Ok, how can I clarify this….What’s the name of your youngest again?” he asked.
“You mean our five-year-old, Lilly?” I asked.
“Yes! Lilly! Ok, let’s say Lilly turns sixteen, and she get’s pregnant,” he said as his eyes looked around the room for the next part of his story.
“And then, God forbid, she dies tragically, and you are left with the kid,” he continues.
“How much more income are you going to need to cover the added expenses of raising your grandchild?” he glances across his desk proud of his detailed hypothetical.
As I see my husband counting on his fingers, I exclaim, “Hold on a second. Do you really think you are going to sell us a life insurance policy based on some hypothetical contingency involving the teenage pregnancy and death of our five-year-old daughter?”
Russell chuckled at his own mistake, thought a minute, and with his finger raised, said, “OK, OK, never mind about Lilly. Let’s use my six-year-old as the example. OK. Annie turns sixteen and gets pregnant. A few years later, she tragically dies, and we are left with the kid….”
“Russell!” I shrieked. Needless to say, we did not buy the life insurance.
Despite the unfortunate hypothetical, we contact Russell every year, and he helps us manage our money.
Each time, we look at him like deer in the headlights, and he has to re-explain how it all works. He uses graphs, props and his dry-erase board to drill the simple principles of personal financial management into our heads, and every year we think we’ve finally got it. Ten minutes after walking out of his office, we have no idea what we are doing with our money.
Our financial manager may not be E.F. Hutton, Charles Schwab, Merrill Lynch, or T. Rowe Price; but we’re just happy he’s not an axe murderer or an international spy.
We trudge right along, blindly faithful that, if we stick to his plan, we will be able to pay our mortgage. We will put our kids through college. We will have a little nest egg for our retirement. We’ll be OK.
Hypothetically speaking, of course.
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I am glad you found Russell. Here are my thoughts on financial advisors.
You may think paying someone to tell you how to save your money is a waste of money. It is not! Financial advisors are a wealth of information. And that information is worth paying for IF you find a good financial advisor. They have seen clients fail and they have seen clients excel in saving.
Here are things to consider when looking for an advisor.
´âÿ Make sure they provide services on a fee basis. You pay them for their time. That way they are not trying to make money off commissions for products you do not need.
´âÿ Check out the Better Business Bureau and make sure there isnÔÇÖt any negative reports on the advisors you are considering.
´âÿ Make sure they have appointment times that fit your schedule ÔÇô you donÔÇÖt need to be stressed out trying to squeeze important conversation with your advisor in on a lunch break.
´âÿ Ask for references from family, friends, co-workers. If there is a good advisor locally, his or her name will come up multiple times from different contacts. ItÔÇÖs kind of like picking a good restaurant ÔÇô you know the food is good if the line is long.