Building Your Financial Team – The Road to Success

Teamwork arrowDear Mr. Market:

How ‘fit’ is your financial team? Putting together a financial team to help you meet your financial goals is like building a winning sports team. Each member of your financial team needs to know what their responsibility is and what they are contributing to your financial success.   With tax-season behind us and the equity and fixed income markets experiencing volatility, now is a great time to assess your team and see if it is truly making the grade!

There is no single approach to building your team or a guide on how to assemble one. The key is the team needs to work for you, they need to give you a sense of comfort and they need to work together. Whether you work with individuals or utilize software solutions it is important that an assessment takes place so that you don’t suddenly find yourself in a hole that you need to dig out of.

In this article we will discuss how to build your “Team of Trust”. We will look at three key areas that every investor should consider: Estate Planning, Tax Planning and Financial Advice. We will discuss some key elements with each member of the team: Why? Who? What? How Much?


Why? Let’s face it nobody likes to think about what will happen when they die much less paying an attorney to discuss in detail! Everyone owes it to their loved ones to have documents in place to not only distribute their estate but to also make the end of life flow as smoothly as possible. A competent Estate Planning attorney will help assemble: financial and medical powers of attorney, medical directives, a will and in certain situations a trust.

There has been a dramatic increase with the number of people who choose the DIY (Do It Yourself) route with Estate Planning.   There are websites and software like: WillMaker Plus, and WillWriter that allow individuals to draft their own documents. These solutions can work if your situation is very simple but there needs to be a sharp eye for detail as many documents will need to be filed and signed by a witness and/or notary. Another issue is the Federal Estate Tax threshold is a moving number – currently it is $5,340,000, in addition many states have thresholds that vary as well. It is also vital that your plan is reviewed every few years as the laws frequently change and an out of date plan is essentially useless or could create headaches that were never intended.

Who? Asking for a referral from another trusted member of your ‘Team of Trust’ would be a logical first step. Ask friends or associates that are in a similar financial situation to you who they work with. Reviews can be found online and you can find if there have been any issues with an attorney by contacting the state or local bar association where they practice. The American College of Trust and Estate Counsel provides details on attorneys and is an ‘invite only’ organization for membership – ensuring that you should be working with a leader in the industry.

What? Take the time to give the attorney your individual details and allow them to share their thoughts – is it a ‘cookie cutter’ approach or specific to your situation? If you want a specialist make sure that you are hiring one. Ask the challenging questions and how much of their practice is dedicated to Estate Planning. Many attorneys claim to “specialize” in several different areas so make sure you know who you are hiring and what their legal focus truly is.

How much? Fees can range all over the board with Estate Planning Attorneys. They might charge a flat fee or an hourly rate that could be over $1,000 per hour. Many firms will allow for you to work with an associate or paralegal for the bulk of the planning and then have one of the partners of the firm conduct the final review – this can often save money while delivering a solid plan. Software packages and online solutions can cost as little as a few hundred dollars. Don’t let the expense be the only deciding factor – keep in mind that this is planning for years down the road. Saving a few hundred dollars now could result in mistakes and losses of thousands later!


Why? As Benjamin Franklin stated, “In this world nothing can be said to be certain, except death and taxes.” Finding a trusted CPA can be a challenging task! It is important to remember that a tax advisor should do much more than just prepare your tax return.  Over the last decade many individuals have gravitated towards software solutions like TurboTax, TaxACT and H&R Block. While all of these can certainly work, one question that is often missed is “what can I do going forward to minimize or manage my tax situation more effectively?” With tax laws changing on a yearly basis it is important to take a forward-looking perspective rather than the mindset of piecing together the past that currently exists with most taxpayers.

Who? If you are looking at using software there are numerous websites and reviews that will help you make the right decision. If you find that you would value working with an individual there are many different factors that you need to consider. Do they specialize in a certain industry? Who is their prototypical client? Are they accepting new clients? The list goes on an on… Many CPA’s prefer to work on a referral basis so ask your other trusted advisors or individuals in a similar financial situation to yours who they work with and specifically why they would recommend them.

What? A relationship with a Tax Advisor should be an ongoing type or relationship and not one that takes place a month before April 15th each year. Ask the questions that will allow you to have a sense of comfort. Here are a few to consider: How often will you meet or hear from them? What is their area of specialty? How do they communicate with their clients?   Perhaps the most important question to ask if they feel they can save you money based on your current situation – a good accountant can make you aware of tax breaks and loopholes that could save you money on your return.

How much? Prices can range from a couple hundred dollars to thousands of dollars – it is driven by your personal situation. The majority of CPA’s charge on an hourly basis but there are some that charge a flat fee. Like with any professional service, fees are important but don’t let that be the sole deciding factor.


Why? You work hard to build your portfolio but is your money working hard for you? There are so many options for investors to consider when looking for assistance with their investment portfolio … it can truly be overwhelming! The DIY mindset is more prominent with this component of an individuals Financial Team than the others we have discussed. With the amount of resources now available and the constant flow of information many investors have taken on this position themselves but is that a wise move? Various studies have shown that investors that use professional help get at least a 2% higher return than those that do not.   When looking at this key component of your team there are so many factors to take into consideration – here is another article that will help with this decision.

Who? In many situations this position serves as the leader of your entire team. Communication with you is vital but it is also required with the other members of your team. More often than not the Investment Advisor is the ‘glue’ that holds the team together. If a change is made in your Estate Plan then accounts most likely need to be retitled and beneficiaries updated. If you have a large gain or loss with your tax situation can you offset these with your investment portfolio? These are just a few examples of how communication and a working relationship with your professionals is vital! As with the other members of your team referrals are a great way to find this key position.

What? Perhaps the most important question you ask any investment professional is who do they work for and how are they paid?   Take the time to carefully listen to their answer! Do they work for a brokerage firm, insurance company, themselves or YOU? Are they paid via commission? Are they Fee-Based or Fee-Only? Ask the advisor what the total fee is for their services – breaking down everything! How often will they be in contact with you and how often will you meet? Are interactions driven by a calendar? How many clients do they work with?

How Much? Fee’s can vary drastically with Financial Advisors; often it is very challenging to get to the bottom line and what they will charge you. Fees can range from under 1% to over 5% on an annual basis! The fee that is paid can have a tremendous effect on the long-term performance of a portfolio! Just because you are paying more doesn’t mean by any means that you are receiving more, in fact it most likely means the exact opposite.


A trend that has grown in popularity in the Financial Services Industry is companies that offer all three of the services we have discussed and much more. Many of the large national brokerage and banking firms offer this type of service to their clients in an effort to capture as much of their business as possible. Essentially they offer Investment Management, Tax Consulting and Estate Planning in one wrapper. Convenience is the driving force behind this but are they delivering superior service as well? Perhaps the best way to answer this question is by making a comparison that many can relate to.

Let’s say your primary physician made you aware of something and recommends that you see an expert for further diagnosis. Would you simply walk down the hall looking for a doctor that specializes in that condition? Or would you look for the best? You would certainly take the time to work with a leader and not simply settle for a doctor that was close by – why would you do anything different with the health of your financial situation?! Working with a team that is employed by the same company could initially seem convenient but how do you know you are working with leaders in each component of your financial picture?  What s the driving factor – convenience or professional service?


Building your own team certainly requires some work but the benefits will prove to be well worth it! You don’t settle for mediocrity or poor performance in other aspects of your life so why do that with your financial matters? Often individuals do not tackle this challenge as it appears to be a bit intimidating or completely overwhelming. Take a step back and evaluate your current situation; do you have at least one member of your team in place? If so, use that member to help build the rest of your team! Chances are that if you work well with them that they either work or know other quality professionals that could help round out your team.

If you have questions or we can be of assistance please don’t hesitate to contact us. With the majority of our clients we are a key member of their financial team and often the leader.  Please don’t hesitate to let us know how we can help!

Plan to fail


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