5 Things To Look For When Hiring a Financial Planner or Financial Adviser
An Interview With Tyler Gallagher
You must truly like the person that is going to be your financial professional. Before you commit, try to learn not only about his or her business practices, but their personal practices as well. When the phone rings and it’s your advisor, you want to be excited to answer the phone!
Asa part of my series about 5 Things to Look for When Hiring a Financial Planner, I had the pleasure of interviewing Erik Sussman, CLU®, ChFC®, CFP® CEO and Co-Founder of The Institute of Financial Wellness.
Erik Sussman is the CEO and Founder of the Institute of Financial Wellness and brings over 26 years of financial services experience, success and insight to his role. Erik is a Certified Financial Planner®, Chartered Financial Consultant® and Chartered Life Underwriter, and is a Registered Investment Advisor.
Thank you so much for doing this with us! Our readers would love to ‘get to know you’ a bit more. Can you tell us a story about what brought you to this specific career path?
Growing up, the financial instability and lack of financial planning at my household caused me a great deal of stress and aggravation. Our family had significant wealth at different moments, and my parents always assumed the money would keep flowing in. However, like happens to countless Americans who do not prepare for the unexpected, tough business and economic cycles hit our family hard — and my parents often found themselves arguing when “the bills were due. “ Because my parents were always robbing Peter to pay Paul and behind every month, my Dad would get overwhelmed and lash out at my Mom. I always carried around a lot of worry about money and I promised to myself I would never find myself in their situation.
Serendipitously, I was exposed to an opportunity to become a financial professional after graduating from college, and I became very passionate about everything I was learning. Not only did I find a career path that would give me the opportunity to make a living, it also taught me a lot of the skills and knowledge that I would need so I could ensure I achieved my financial goals and had priceless peace of mind.
Can you share a story about the most humorous mistake you made when you were first starting in the industry? Can you tell us what lesson or takeaway you learned from that?
From the beginning of my career, I have always felt a strong desire to help everyone. I’ve cared more about my prospective clients’ financial positions than they did about themselves. I had a hard time letting go and seeing the signals when someone simply did not care. One time, I pretended I had to go to Brooklyn so I could take a train ride with a prospective client and show him a proposal for arranging his finances. In retrospect, this person really did not care about arranging his finances, and I ended up wasting several hours of my time and energy.
Along the way, the most important lesson I’ve learned is the proverbial: “Have the courage to change the things you can change, the serenity to accept the things you cannot change, and the wisdom to know the difference.” When it comes to this field you can’t help people who don’t want to be helped! However, on the bright side: this approach then helps pave the way for you to identify those who DO want to be helped, and focus your energy and efforts on the right clients!
Are you working on any exciting new projects now? How do you think that will help people?
At the Institute of Financial Wellness, we are working on a project that enables people to get financial advice and guidance on their 401(k) plans. For most people, their 401(k) will be their largest and most important asset for retirement, and for the most part, people are not confident in their investment selections. Through a special program called a self-directed 401(k), we will align people with financial professionals to manage these assets for them so they don’t have to randomly pick their own investments.
Are you able to identify a “tipping point” in your career when you started to see success? Did you start doing anything different? Is there a takeaway or lesson that others can learn from that?
The tipping point for me came when I recognized that I needed to learn to let go of those who didn’t want to be helped, and focus my energies on those who did understand the importance of an appropriate financial strategy to “Get There” in life. Interestingly, when I began doing this, I felt happier and more productive than ever. When I was promoted into management, I carried this same philosophy into training and mentoring other financial professionals. I only gave my time to those financial professionals who cared as much as I did about their careers. I guess the lesson is: rather than trying to save people who don’t want to be helped, focus 100% of your efforts on those who do want to be helped.
What three pieces of advice would you give to your colleagues in the finance field to thrive and avoid burnout? Can you give a story or example?
To anyone starting out in the field, I would offer the following advice so they don’t burn out:
1. Only work with prospective clients you like and who need, want and have the capacity to take action on your suggestions and advice.
2. Figure out the parts of the business you truly enjoy and find a way to delegate or team up with others to complete the tasks you do not enjoy.
3. Choose a revenue model that has recurring revenue, as this will enable you to build financial stability for your business and encourage you to provide great levels of service to your clientele because you need to earn their business each and every day.
Ok. Thank you for all of that. Let’s now move to the core focus of our interview. As an “finance insider”, you know much more about the finance industry than most consumers. If your loved one wanted to hire a financial advisor (not you :-)), which 5 things would you advise them to find out about before committing? Can you give an example or story for each?
1. You must truly like the person that is going to be your financial professional. Before you commit, try to learn not only about his or her business practices, but their personal practices as well. When the phone rings and it’s your advisor, you want to be excited to answer the phone!
2. Make sure you check their brokercheck.org and do not see a pattern of customer complaints or financial issues. You certainly want to work with an advisor that has happy clients and has their own financial house in order
3. Be certain to choose a well-rounded fiduciary. Today, unfortunately this term has become misused to the point that the American public does not understand the true meaning of a well-rounded fiduciary. There are a growing number of so-called “fiduciaries” out there who are one-dimensional and only focus on investment management, and do not have the necessary licenses or knowledge to offer any much-needed protection and distribution products. This means, they will only focus on managing your money by investing it in stocks for example, but they won’t provide you with other options like annuities, life insurance or long-term care insurance which you may need to protect you and your loved ones. They focus on selling whatever products they are able to sell, rather than developing customized solutions that ensure their clients achieve their unique goals. The bottom line is, there is no one-size-fits-all solution when it comes to personal finance.
4. Select a financial professional who is part of a team because it often results in a better overall experience. They will be able to provide better service because they have help, and you will often have more than one person reviewing your financial position; two or three heads are better than one!
5. Make sure your financial professional is not beholden to any one financial institution so they can represent you and not a financial institution! You do not want to work with anyone who is incentivized to sell products or services. Their only incentive should be developing the customized solutions necessary to keep you on as a happy client and ensure your best life.
I think most people think that financial advisors are for very wealthy people. This is likely not actually true. Can you explain who would most benefit from hiring a financial advisor and why? Can you give an example?
I believe that in one way, shape or form there is a financial advisor for everyone out there. Depending on your stage of life, different kinds of advisors may be appropriate. I actually believe “middle America” needs financial advisors more than the wealthy. If you’re wealthy, you will likely have enough money and your financial decisions don’t always change your lifestyle, however someone with a modest income really can benefit from good advice. It could make the difference between having a secure retirement or just living on Social Security in retirement.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
I will provide two:
1. Early in my career, I was fortunate to have a mentor, John Murphy. At that time, I was reading a lot of personal development books and learning a lot about life. Murph was an amazing example. While I was reading all those books, I watched him exemplify behaviors the books would mention. For example, in The 7 Habits of Highly Effective People, Covey has a chapter dedicated to “seeking to understand, before seeking to be understood.” I remember reading that book and right before my eyes observing Murph engaging with co-workers, prospective clients and others and always listening so intently. That is one of many examples of things I learned from his actions.
2. My co-founder and brother, Darren. While I could have continued to stay in the security of CEO-level positions at major national firms, my brother encouraged me to take the leap of faith to start my own entrepreneurial venture. He inspired me that there was something bigger waiting, and our joint efforts at that time are the reason I am having this amazing interview with you today — and helping millions of Americans achieve the financial security and peace of mind they never dreamed possible.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
Well, I am currently inspiring that movement! The Institute of Financial Wellness is a movement to provide the financial education, resources and services that Americans need. We are making a huge difference in America and helping millions of people “get there” and live their best lives.