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Grow Your Business Finances

When it's Time to Find a New Financial Planner (Op-Ed)

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Ron Greenberg is a partner at Greenberg & Rapp Financial Group and a member of the Entrepreneurs' Organization (EO) of New Jersey. He is a frequent speaker on the topics of preserving family wealth and exit-planning strategies for business owners. Greenberg contributed this article to Business News Daily's Expert Voices: Op-Ed and Insights.

Business owners need financial planners to guide everything from protecting the business in the event a key person passes away to succession or continuity planning. Financial planners can also help a business owner plan for life beyond the business and figure out what to do if a partner unexpectedly dies or becomes disabled.

A financial planner should have a working knowledge of many things, including life insurance, retirement products (along with alternative plans), college education planning, taxes, estate planning, long-term care insurance, long-term disability and wills. Your financial planner doesn't need to be an expert in all things, but you need to ask him or her questions on these topics.

Basically, your financial planner should know enough about all of those areas to be dangerous and have expert partners in the industry to provide a holistic financial experience. Unless you are only looking for a financial planner to do one thing, that knowledge is a key attribute to look for in a financial planner.

When choosing a financial planner, start by asking other trusted advisors — like your company's accountant or attorney — for recommendations. Friends and neighbors may also have recommendations, but make sure their circumstances are similar to yours. After you've narrowed down your options, interview two or three financial planners and ask for references.

Once you've chosen a financial planner, there are a few things to look out for to make sure he or she is the right fit for your business. If you run into any of these six situations, you need to start shopping for a new financial planner.

You don't hear from your financial planner

For a financial planner to do his job properly, he needs regular updates on your life and business. If you do not hear from or meet with your financial planner often, he cannot make the recommendations you need. Your financial planner needs to know all of the major personal, professional and financial things going on in your life. For example, your financial planner needs to know if you've inherited money, sold a business or bought a building for your company.

He is always trying to sell you something

Some financial planners also provide financial products geared toward managing wealth or insurance. If your financial planner always pitches a new product or vehicle, it may be time to find someone who isn't so "transaction-focused."

Your financial planner doesn't ask questions

In addition to staying updated on your business and personal life, your financial planner should constantly be asking about your goals and objectives — and making sure they haven't changed. This includes everything from your family life to investments and savings. Your financial planner should be updating his fact-finder on you frequently as your business grows and your family changes. This helps him stay up-to-date on your needs. If your planner isn't asking about these parts of your life, he isn't putting together a customized plan.

His fees are out of whack

If you're questioning your financial planner, it's never a bad idea to get a second opinion. If you are happy with your financial planner, fees alone aren't a reason to make a change, but you should make sure you're paying a reasonable and customary amount. Remember, you get what you pay for, so if your financial planner is only managing some of your money and not a holistic planner, your fees should be lower.

Your financial planner is frequently challenged by the questions you ask

As stated above, your financial planner does not need to be an expert on all topics. That said, if your financial planner continually has to check on the answers to your questions and get back to you, you may have outgrown him. If you're worried your business has outgrown your financial planner, ask what his typical client looks like. You can also ask to talk to clients that are similar to you in issues and net worth.

Your portfolio returned far less than the market returned

Another indicator can be your portfolio. If you are in growth mode — and you have communicated this to your financial planner — your stock returns should be similar to the broad stock market returns. For example, if the stock market returned 12 percent, but your investments returned 6 percent, that might be a problem. Make sure your financial planner knows if you want to grow your portfolio or be conservative, because if there is a communication problem, you cannot blame him for your returns being less than the market's.

At the end of the day, finding the right financial planner is about finding the right fit for you and your business. Some financial planners are geared more toward Middle America, while others primarily work with a more affluent clientele. Make sure your financial planner still fits your income and business level, especially if you've grown from a one-man team to dozens of employees.

The views expressed are those of the author and do not necessarily reflect the views of the publisher. This version of the article was originally published on Business News Daily.

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