How to Interview and Hire a Financial Team
Summary: You can DIY a lot of your financial life, but sometimes you need some help. But you only want to choose the best people when it comes to your money. Today we’re discussing how to interview and hire a financial team.<br> Shannon McLay from <a href="https://www.listenmoneymatters.com/financialgym">Financial Gym</a> is our guest today. Financial Gym provides one on one personal training to help people achieve their financial goals.<br> Don’t Be Afraid to Ask<br> At LMM, we always tell you that you can handle your money on your own and that no one will care more about your money than you do. If you can master <a href="https://www.listenmoneymatters.com/go/mint/">Mint,</a> <a href="https://www.listenmoneymatters.com/go/betterment-review-link/">Betterment</a> and Turbo Tax, you can mostly DIY it.<br> There are some circumstances where you need to find some outside help. When that happens, you have to hire a financial team. Who should be a part of your team and how do you know a good member from a bad one?<br> Drafting Your Team<br> Not everyone needs all of the team members listed below. Depending on your circumstances, you might need none or all of them.<br> Accountants, Who Needs Em?<br> If you are a W2 employee, you don’t need an accountant. You need a bottle of wine and Turbo Tax. If you are self-employed, or have not filed a tax return for the past year or years, or have had significant life changes in the past year, gotten married, had a kid or gotten divorced, you might need an accountant.<br> Or CPA’s?<br> A standard accountant cannot represent you before the IRS, so if you have to deal with that particular body, you need a CPA. If a person who acts as their own attorney in a courtroom has a fool for a client, a person trying to deal with the IRS alone is equally foolish.<br> Lawyers<br> Most of us don’t need to hire a lawyer either. You can do a lot of simple things like basic <a href="https://www.listenmoneymatters.com/estate-planning-a-primer/">estate planning</a>, wills, and trusts, and assign power of attorney through <a href="https://www.listenmoneymatters.com/go/legalzoom/">Legal Zoom.</a> You may have to have the documents certified locally, but for basic stuff, you don’t need an attorney.<br> If you have a lot of assets or complicated family relationships, you may need to hire an attorney to handle your estate planning, but most of us can do the basics on our own with Legal Zoom.<br> Financial Advisors<br> This person is the quarterback of your team. They call the plays. As such, they have to be doing a lot more than just “managing” your money. This person doesn’t work for free, so if they are only handling one aspect of your financial picture, you’re wasting your money.<br> Actively managed funds <a href="https://www.cnbc.com/2017/04/12/bad-times-for-active-managers-almost-none-have-beaten-the-market-over-the-past-15-years.html">almost never</a> beat the market. If you want your investments to make money, the important thing isn’t to have a financial advisor; it’s 90% asset allocation and 10% what kind of assets are in your portfolio.<br> “Active funds stumbled through another brutal year, with barely 1 in 3 large-cap managers able to beat the <a class="inline_quotes" href="https://www.cnbc.com/quotes/?symbol=.SPX">S&P 500</a>, according to figures released Wednesday by S&P Dow Jones Indices. The news got worse farther down the scale, with 89.4 percent of mid-cap managers falling short and 85.5 percent of small-cap managers missing.”<br> A good advisor does a lot more than manage your money though. They help you create a financial plan and adjust it when you have significant life changes happen. Your advisor will help you stay on track with your financial goals. He or she can also serve as a tie-breaker between you and your spouse.<br>
