Money Magazine Ask the Mole

Day one with a financial planner

The first meeting with a new adviser should yield some useful advice. If it doesn't, you might want to walk away.

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By the Mole, Money Magazine's undercover financial planner

Have future topics for the Mole to address? E-mail him at
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NEW YORK (Money) -- Question: I'm meeting with a financial planner for the first time. Can I expect to get some specific advice, or just a sales pitch? Will I need to sign an agreement?

The Mole's answer: While some planners may not be willing to give away "free advice" at the first meeting, I strongly feel that a potential new client should walk away with something useful, even if an agreement hasn't been signed yet. But in order to do that, it's crucial that the planner gain some understanding of the client's situation.

When a potential client comes to a planner, they are seeking advice that can have a dramatic impact on their future. All clients have different situations with different goals, so a cookie-cutter approach and a sales presentation is the very last thing they need.

Sure, I know that many financial planners pay to get leads, and closing the deal is all they care about. I can't reach those planners, as my advice is threatening to their very existence. In fact, many conferences I've attended on how to land a new client had absolutely nothing to do with understanding the client's situation.

But financial planning is suppose to be about serving the public, and serving the public means that we have to put the public's interests ahead of ours.

So I chose this forum to let the consumer know what to watch out for and what to expect.

The Mole's model: Before I see a new potential client, I screen in two ways. I have them spend an hour completing a client profile and some time on my Web site to see if they think there is a potential match.

I'm not concerned about the size of their portfolio, but I also don't want to waste my time with anyone too lazy to invest an hour up front, or someone expecting me to tell them what the next hot stock will be. If they've invested a little of their time, then I'm more than happy to invest some of mine and spend an hour reviewing their situation.

I want them to walk away from the meeting with something useful such as whether they are or are not on track to meet their goals. I might also tell them how diversified their portfolio may or may not be, or that their expensive mutual funds have underperformed and are likely to continue to do so.

I feel good about giving potential clients something useful, and I also let them know what I can do for them. I can give them recommendations on getting into lower cost investments, or show them how they have been performance chasing. That's the value that I, as a financial planner, can bring to the client.

So, in addition to getting to know potential clients and giving them my opinion of their current situation, I let them know what I can do for them and the costs associated with the planning services I'm proposing.

And I'm not suggesting that I do this for free. I don't have an agreement printed out for them to sign because this decision is too important for them to make on impulse. If they decide to go with me, that's great. If they go another route, I come away feeling that I've done something positive for the public, and for the group of planners that calls what we do a service.

My advice: never to go with a planner that isn't directly addressing your situation. Ask the tough questions up front and make sure you understand the overall strategy she is suggesting. Never sign an agreement on the day you meet this planner - first, go home and sleep on it and then talk it over with others you trust.

The Mole is a certified financial planner and certified public accountant who - in the interest of fairness - thinks you should know what goes on behind the scenes in financial planning. Want to make contact? E-mail him at  To top of page

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