Selecting a Financial Advisor: The Give-and-Take Process


A job interview is a two-way street. It's important for the employer to learn as much as possible about the potential employee, and vice versa. After all, just because an employer wants to hire you, doesn't mean you want to work there.

“To accept good advice is but to increase one's own ability.”—Goethe

A job interview is a two-way street. It’s important for the employer to learn as much as possible about the potential employee, and vice versa. After all, just because an employer wants to hire you, doesn’t mean you want to work there.

It’s no different when physicians select a financial advisor. “Especially during the initial meeting,” explains Angie Strunk, president of Capital Concepts, one of Cincinnati’s fastest growing financial planning and business development firms. “The financial planner should be asking questions to determine if you’re the type of client they work best with.”

And, it’s just as important for physicians to ask the right questions.

The Starting Point

Strunk suggests that a good place for physicians to start when interviewing a financial advisor is by finding out how much the advisor’s services are going to cost. “Get it out in the open,” says Strunk. “Most people don’t feel comfortable talking about money in general. Make sure it’s clear and that everyone is comfortable with the arrangements.”

Some advisors are paid a fee based on the work they perform for their client, others receive a commission from the companies they represent. Bill Keller, vice president and director of investments for PNC Wealth Management, says the latter arrangement could spell trouble. “If the advisor starts talking about products at your first meeting, that is a bad sign,” cautions Keller. “That means the advisor is probably compensated for the sale of a product and doesn’t want to understand the physician’s unique needs.”

Keller says it’s also important to know an advisor’s credentials early on. The two main designations physicians should look for are CFP, for certified financial planner, and CFA, or chartered financial planner. Both require a considerable amount of schooling and qualifications, with the CFA focusing more on technical aspects and the CFP more on personal issues like handling taxes.

Experience Helps, But …

While selecting a financial advisor who’s still wet between the ears might not be the way to go, experts agree that experience—to an extent—can be overrated. “I would never say, ‘Don’t go to someone just because they don’t have another client in your particular field,’ because everyone is going to have a first type of client,” says Strunk. But, she adds, physicians have certain nuances that other business owners might not, including partnerships and employee profit-sharing plans. As such, familiarity with physician issues is a big plus when selecting a financial advisor.

Keller echoes those sentiments when it comes to years of experience. “I’ve worked with some very good young people, and I’ve worked with some very bad old people,” he explains. “Candidly, the investment world has changed. It used to be that your advisor picked stocks for you, and that’s not the model that a physician should look for today. Physicians need someone who is going to set up a plan for them, and help them execute that plan.”

Keller says that any initial conversation with a financial advisor should include five key topics: timeframe, liquidity needs, taxation of assets, legal issues, and unique circumstances, such as having a special needs child or being charitably inclined. In other words, the advisor should be probing to learn as much as possible about the physician.

“Two physicians are going to have very different needs, goals and aspirations,” says Keller. “Their investments could be wildly different. A good advisor should be saying, ‘I need to know more about you before we can even get to the point of having a product or performance discussion.’”

No Full House

It’s also important for physicians to understand how many clients a financial advisor has. For example, if an advisor has more than 100 clients, how much personalized attention can actually be given to each of those clients? “It’s very important for physicians to ask if they’re going to be working with the advisor, or will they be referred to one of his junior associates,” says Strunk. “That’s not necessarily a bad thing, but you want to know that up front.”

And, adds Strunk, ask to have in writing all financial arrangements, from how the advisor will be paid to how often they will meet with you to review your account.

It’s also important to remember that, just as the age-old expression states, there are no dumb questions. “If you feel like you want to know something, you should feel comfortable enough asking it,” Strunk emphasizes. “If a financial advisor makes you feel like you’ve asked a stupid question, maybe they’re not the right one for you.”

Ed Rabinowitz is a veteran healthcare reporter and writer. He welcomes comments at

More for You:

Cracking the Mysterious Code of Financial Advisers

10 Questions to Ask Your Planner

A Worksheet Approach to Selecting a Financial Planner

Quizzing Financial Advisors

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