More Advice on Choosing a Professional

As I explained in my last column, estate planning begins and ends with competent professional attorneys versed in estate planning basics. Choosing such an attorney is not easy. The best advice I can give: word of mouth referral is an excellent route to choosing the right lawyer for your needs.

Bank trust officers may also be helpful as advisors and they also are likely to charge an asset-based fee. Beware of any advisor with an agenda — that is, anyone who will be compensated from investments they recommend that you purchase. This is especially important to inquire about when dealing with stockbrokers or insurance agents. You want your advice to be as objective as possible, free of any conflict of interest or even the appearance of a conflict of interest. Brokers representing an organization with its own set of mutual funds, for example, may recommend only those funds; insurance agents may recommend only the mutual funds or annuities managed by their employer’s insurance company, and the brokers or agents may be compensated on the basis of assets they bring into the family of mutual funds. There are so many other reputable advisors available that are not connected to particular investments that it seems the best course is simply to choose one of those, or verify that the broker or insurance agent is not compensated based on sales of securities into particular funds.

Be wary about investment advisors that brag about the performance of investments they recommend — performance simply cannot be predicted from year to year. We have already learned that you will use asset allocation as your investment guideline. Anything short-term in the advisor’s horizon that causes them to tout their investment performance ought to set off warning bells in your head.

Review your contract for services with the professional. Ensure that the contract is terminable at your request within a reasonable timeframe and without any severe monetary penalty. Also make sure your advisor will be accessible to you. You are hiring the advisor, not the advisor’s assistant or secretary. You should demand that the advisor meet with you at least twice a year to review your portfolio. Many advisors meet with clients once a quarter.

Review the written investment account report that the advisor will send you. Does it respond to your questions? Is it complete enough to give you an idea of what the advisor has been doing with your money? Are you getting tax information?

Finally, trust your instincts. Use a professional when you feel you do not have sufficient information or assistance—like going to a doctor when you are sick. Approaching your financial health this way is good preventative medicine.

This entire series is online at if you ever need to review them, or refer them to a friend or relative. You can even post them to your Facebook pages!