In many ways a financial advisor is the primary care physician of your financial health. For this reason, physician investors should take the time to research and interview potential advisors before committing to working with them. Referrals can be an important place to start. Friends and family might help steer you toward a good match. A Google search can also be enlightening, especially when there are a good number of reviews to read through.
Research and referrals are just the first step. Your next step should be to formulate a series of questions to ask your potential financial advisor when you meet with them for a preliminary consultation. These could include the following.
How much experience do you have working with physicians? Right from the start, it will be important to determine whether your financial advisor candidate is a good fit for your specific needs. Although not all doctors are the same (obviously), some familiarity with the financial challenges of working in the medical professional will be helpful. What are your areas of expertise? According to Kiplinger, you should cut through the fancy titles and designations that so many financial advisors carry and ask point blank what they provide as an advisor. Is the candidate a financial planner who can help organize retirement planning, provide tax advantaged strategies, develop college savings plans as well as investment strategies? Or are they more of a portfolio manager who is focused on the stock market?
Are you a fiduciary? This is an important question. As defined by the Huffington Post, a fiduciary is a professional who is legally and ethically required to always work in your best interests. Not all financial advisors are fiduciaries. Designations such as certified financial planners and registered investment advisors are held to this standard, but other types of financial advisors don’t have to be.
How are you compensated for your services? This is closely related to the question above. How can an advisor be working in your best interest if their primary source of commission is a certain mutual fund that may not be a good fit for you? Find out if they work based on a flat fee, charge a percentage of the assets they manage or draw compensation from commissions. This will give you insight into their motivations as well as what you can expect to pay them for their services.