Choosing a Financial Advisor
Why Choose Us?
It can be hard to choose the right financial advisor for you. There are several different types, each with different obligations to their clients. Making matters worse, what an advisor calls themselves doesn’t tell you much.
So, a lot of people default to asking their friends who they work with even if that person is not the right fit for you.
There is a better way.
This page should help you identify whether or not we are a potential fit for you. If we’re not, it should also help you in your search.
Some of these even feel like a secret (see below: Fee-Only, Investment Philosophy and Dynamic Income Planning). They’re not a secret, of course. Nothing we are doing is proprietary. It just feels like a secret.
I think there are two reasons.
The first is that the financial industry is not well understood by consumers. Wall Street and the insurance lobby spend millions to keep it that way.
The second is that not a lot of advisors do things the way we do. In fact, very few, if any, check all these boxes.
It’s also important to note our bias in recommending these areas as differentiations because they apply to us.
However, as an independent firm, we get to choose how to do business. We’re not highlighting these areas because we happen to be this. We intentionally chose to do business this way because we believe it is right.
Choosing an Advisor – Narrowing It Down
These characteristics aren’t perfect, but by hiring a Fee-Only advisor you eliminate most of the conflicts of interest that lead to poor advice and hiring a CFP means the advisor at least has a baseline level of competence.
1. Fee-Only: Fee-Only advisors are only compensated by their clients. They don’t sell any products for a commission. This eliminates many of the conflicts so prevalent in the financial industry.
2. Certified Financial Planner: To become a Certified Financial Planner professional, an advisor must successfully complete a multi-year, multi-step process. This includes an education requirement, as well as continuing education requirements. They also must pass an exam and have at least 2 years of real-life experience.
A great place to start finding advisors like this is at napfa.org.
To be a member of NAPFA (National Association of Personal Financial Advisors), the advisor must be a CFP and be Fee-Only. A Fee-Only advisor acts as a Fiduciary at all times, not just some of the time like a Fee-based advisor. We are a proud member of NAPFA.
By focusing here, you will narrow down your choices significantly.
Once you’ve narrowed it down, it’s time to find the right advisor for you. The following list shows the areas we believe you should focus on, along with where we stand in each area.
3. Expertise – If you needed knee surgery, you wouldn’t go to a cardiologist. Similarly, someone could be a great advisor and your neighbor likes working with them, but they don’t specialize in working with people like you.
- We specialize in working with people retiring solo. From discussing unique estate planning issues or knowing the IRA inheritance rules when you’ve lost your spouse, we think our collaborative process and patient demeanor seems to resonate.
- Our technical expertise is at the intersection of taxes and retirement.
- Dynamic Income Planning – A lot of people rely on rules of thumb with retirement income like the 4% rule and “spend the income.” A step up from this is Monte Carlo analysis, which a lot of advisors use and call it retirement planning. This gives you a probability that you won’t run out of money. While helpful, it doesn’t help you avoid running out of money. We used to do this, but we believe we’ve found a better way. Starting with a Monte Carlo analysis, we can give you a better idea of when to adjust, and by how much, beforehand so you have a true plan of action. You should be able to spend more now if you’re willing to make small adjustments along the way.
- Enrolled Agent – An Enrolled Agent is the highest designation awarded by the IRS. While we don’t do tax preparation, we’ll review ways we can lower your lifetime tax bill in retirement. After all, taxes will be the largest expense in retirement for many of you.
4. Big Firm or Small Firm? – There isn’t a right answer here, but there probably is a right answer for you. A small firm should feel more like a small local business as opposed to a more corporate feel. With us, your Advisor is Robert Lindstrom, who is also the founder of the firm.
5. Investment Philosophy – A lot of advisors will claim they can beat the market by guessing which stock or sector is about to outperform, or even time the direction of the market. The data shows most people do not do this successfully. Not only that, but you also risk large underperformance. We don’t claim to know the future and build portfolios so you don’t have to guess the future.
6. The last, but not least, area is personality or demeanor. It’s nearly impossible to define, but it is important when choosing an advisor. This includes the way the person communicates.
- We believe we are well suited for people who want a collaborative and patient thinking partner, especially if you’re retiring solo.
- The only real way to test this is to work with someone. That’s why we have three meetings before you become a client, so you have the chance to experience what it’s like to work with us rather than us just telling you. Even once you become a client, you should only continue to be one if we are adding value in excess of the fee we charge. For that reason, our contracts can be cancelled at any time for any reason.
If this sounds like we may be a good fit, I hope you’ll consider scheduling an intro meeting. If not, I hope this helps you find the right advisor for you.
–Robert Lindstrom, CFP, Founder and Advisor