Finding a Financial Planner

June 1, 2010

Everyone wants a trustworthy financial planner, but how to find one? Here’s your guide to asking the right questions.


Just a few years out of a physical medicine residency, Taha Jamil wasn’t looking for a financial adviser. But when a colleague recommended someone last year, he decided to at least have a conversation with the adviser.

“Eric and I just immediately hit it off, and my wife really felt comfortable with him. It was just a gut feeling,” Jamil says of Eric Heiting, an insurance broker and financial planner based in Madison, Wis., who specializes in physician clients.

By his own account, Jamil didn’t do a lot of comparison shopping when hiring Heiting, which is common among young physicians who are just starting to save and invest money.

Even after Bernard Madoff’s historic Ponzi scheme and a slew of other recent cases involving affluent but unsuspecting clients being ripped off in stunning fashion, advisers who cater to physician clients often say a simple personal recommendation is all they need to get a new client.

Colleague recommendations and gut feelings do count for a lot when finding a financial adviser you can trust, but even financial advisers - including Heiting - often wish their clients did a little more digging, if for no other reason than solidifying their choice.

“The mistakes I see are so basic,” says William “Ben” Utley, an adviser and founder of Physician Family Financial Advisors Inc. in Eugene, Ore. “To my knowledge, most clients never even look at a second potential adviser.”

Ask the right questions

Interviewing at least two, and preferably three, potential advisers is one of the best ways to find someone you trust and with whom you can have a long-lasting relationship, says Chuck Jaffe, author of “Getting Started in Finding a Financial Advisor,” a recently published book on hiring financial pros, from planners to real estate agents and attorneys.

“You could go to the worst financial person in the world and whatever they say can sound brilliant because you’ve got nothing to compare it to,” Jaffe says.

Hearing different answers to a common set of questions will help deepen your understanding of how much you’re paying for investment advice, what sort of responsibility an adviser has to act on your behalf, and whether the adviser truly understands physicians’ specific needs when it comes to long-term planning issues like asset protection and retirement income.

What are those burning questions? Here are the most important to keep in mind:

How do you get paid? Careful here. Every book and article on this topic suggests asking this question, so investment pros have already thought about answering it, and good business people will answer it in a way that sounds most advantageous to them.

The lines between traditional securities “brokers” who are required to sell suitable investments to clients, and investment advisers who have a fiduciary responsibility to put your financial interests ahead of their own have blurred in recent years, and Congress continues to debate new rules that attempt to distinguish them or hold them all to a uniform standard.

There are ways to solidify your understanding of a prospective adviser’s business model, however.

Start with the adviser’s Web site and marketing materials. Does the acronym FINRA follow the professional’s name? If so, he is regulated as a broker-dealer to sell securities under the self-regulatory organization Financial Industry Regulatory Authority. (At www.finra.org, you can input a broker’s name and check for previous disciplinary actions.)

If the adviser carries the title Registered Investment Advisor, the governing regulator is the Securities and Exchange Commission, or in the case of advisers with fewer assets under management, state regulators. (Visit www.sec.gov, then click on “Check out brokers and advisors,” or go to individual state securities offices.) Ask these advisers for Part 2 of the Form ADV, which requires advisers to spell out their business model and any conflicts.

It’s important to note that sometimes advisers are dually registered and neither designation is an iron-clad guarantee you can trust her. The brokerage community believes its responsibility to provide only “suitable’’ investments is more thoroughly and tightly regulated than the advisers’ fiduciary standard. Conversely, advisers say being a fiduciary is the gold standard of untainted investment advice. It is, indeed, a higher standard, but bad apples can exist in any model.


That’s where your recommendations and your gut feel come in. Have a frank conversation with the adviser, asking how potential conflicts of interest will be disclosed and what legal obligations are in place that govern the advice you will receive. Let him know you understand the difference between a suitability and a fiduciary standard, and you want to know to which he is held, because some bat the two terms about interchangeably.

What about your clients? Ask for a sample financial plan (a real one with names and personal details omitted) for a customer in a similar financial stage. This is where it can help to hire someone familiar with the issues facing physicians.

When Utley gets a financial planning question from a physician client, he often uses the opportunity to pass the knowledge along to his network of other physicians.

Of course, keep in mind that a divorced neurosurgeon getting close to retirement has very little in common with a married family-practice doctor right out of residency.

“The truth is we know very little about our friends’ financial lives,” even if they are physicians, too, notes Jaffe. You could even work in a single-specialty practice and still have a vastly different risk tolerance and financial situation from your colleagues due to, say, what your significant other does for a living.

If you do get a reference from a colleague, Jaffe adds, ask what the colleague did in the way of vetting the adviser.

What happens if something happens to you? “I do get that question a fair amount,” says Heiting, who runs a one-person shop. He is looking to bring in other partners to his business, but in the meantime he reminds clients that their investments are cleared through a third party. Whichever business model a potential adviser has, make sure you understand the checks and balances.

Even if you exhaust all these measures in hiring an adviser, it’s important to stay vigilant after the hire. “Unfortunately as the market got bad, a lot of advisers went bad,” notes Jaffe. “There’s a lot you can do to check out someone’s past, but there’s not much you can do to protect yourself from advisers who go bad on your watch.”

Take notice and start asking questions immediately when anything out of character happens, he says, including changes to the format of your monthly statements, which can be checked with the third-party clearing firm holding your money.

“People like to believe they intuitively understand who they can trust,” Jaffe says. “I trust my kids, but you can bet that if my teenage daughter told me she was getting married, I’d be doing background checks.”

Janet Kidd Stewart is a freelance writer based in Marshfield, Wis. As a contributing columnist for the Chicago Tribune, she writes a weekly, syndicated retirement column called “The Journey” that appears in Tribune newspapers across the United States. She holds a bachelor’s degree and master’s degree from the Medill School of Journalism at Northwestern University. She can be reached via physicianspractice@cmpmedica.com.

This article originally appeared in the June 2010 issue of Physicians Practice.