Trust your gut when choosing a financial adviser

The first time I met with Whitlee, a certified financial planner at Fidelity Investments, she said that her predecessor had left this note in my file: She doesn’t want to be contacted or see us often.

It’s now a couple of years later, and when I saw Whitlee last week for our annual visit, I told her that she had to stay put for at least two years, until my Retired Minimum Distribution — the amount the IRS makes you start taking from retirement accounts at age 70 — is figured out.

Whitlee changed my attitude about financial advisers from suspicious to trusting.

Most of the financial advising tips you see are about choosing between fee-only advisers and those who receive commissions on the investments they sell. I don’t find as much discussion about using a free in-house financial adviser, which Whitlee is. All the major investment companies have them, as do banks and credit unions. Maybe these in-house people aren’t suggested as much because they sell their employer’s products — i.e., they’re supposedly not objective.

Fidelity funds were among the choices Northwestern University offered for my retirement savings. I had investments with Fidelity for many years before meeting with anyone. Through a combination of luck and Money magazine recommendations, my handful of mutual funds did well enough for me. I wasn’t looking for wow gains, just steady growth.

But Fidelity kept sending me messages about the importance of planning for retirement, so I gave in and scheduled an appointment.

My first experience didn’t reassure me. It came just before the 2008 financial crisis.

The young woman I saw recommended removing all my money from the funds that had done well and reinvesting it in a combination of funds that I suspected fit some ideal distribution she’d learned in business school. I balked — thank goodness, because if I’d followed her advice, I would have bought high, and the funds’ values would have plunged shortly thereafter in the crash.

I let a Fidelity higher-up know how I felt about the advice, and he apologized. Then for years I ignored the letters about coming in for a planning session. Finally, a phone call from someone at Fidelity in Chicago persuaded me to give them another chance.

I saw a man named Chris in Fidelity’s downtown office on Michigan Avenue at the river. I liked Chris, and he heard me about taking a scalpel rather than a sledgehammer approach. He recommended leaving most of my portfolio intact.

It wasn’t long, however, before Chris was gone to another office. A downside of working with an in-house person is that you can’t be sure you’ll have the same adviser long-term. Chris is the one who left the note in my file warning his successor that I was wary of financial advisers.

That brings me to Whitlee. A product of rural Kentucky, she doesn’t fit the slick business stereotype, but she proves that being warm and down-to-earth can be compatible with knowing her stuff. We discussed the big picture, not just the allocation of retirement savings but also getting all my legal documents (will, letter of instructions, financial and medical powers of attorney, Transfer on Death Instrument, living will, etc.) in order. We talked about charities I might want to include as beneficiaries. And in between we talked about her wedding plans and my nieces’ college applications.

Meeting with Whitlee was the first time I thought that getting a business degree could lead to a public service career. I’d stereotyped people who majored in business as motivated by making big bucks. A Fidelity financial adviser probably earns a good salary, but I sense that Whitlee is also motivated by helping people. She is helping people make sure their last decades are secure, and that seems like a calling to me.

So, I had a bad experience with a Fidelity adviser and a good experience. My conclusion is that the most important factor in choosing a financial adviser, whether you want an in-house, a fee-only, or a commissioned adviser, is trusting your gut about the person. If your gut sends up red flags, find someone else. If you click with the adviser, it is helpful to stop trying to figure out everything on your own.

My fingers are crossed about Whitlee’s staying in Chicago for a few more years.

*****

I don’t want to end this post with the impression that all trustworthy financial advisers are equal. Compared with independent advisers, financial planners at banks and credit unions offer a more limited selection of financial products whose fees are usually higher, according to Forbes. Big companies like Fidelity have more investments available. The investments available in the Fidelity network number in the thousands and include more than Fidelity’s own funds, so I’m comfortable that my uncomplicated needs are covered.

I’m also not so naive as to think that in-house advising is totally free to clients. The cost has to come from somewhere. I imagine it comes from the management fees of the various funds, in which case I’m paying the fees whether I seek advice or not.

If you want to learn more about the types of financial advisers, you can find plenty of information online. Whichever type you choose, look for someone who has a Certified Financial Planner (CFP) credential.

Leave a comment