Health Care

4 Questions Dentist Should Ask a Financial Planner

The barrier to becoming a financial planner is low, which means there’s a wide gap in talent and ability in the field. Some “advisors” don’t have much of a financial background. Besides, dentists and other medical practitioners require someone who understands the intricacies of running a practice. Who’s handling your money?

When it comes to financial planning for dentists, here are four questions you should ask before getting out your checkbook.

How Do You Invest Money for Your Clients?

Ask the advisor to explain his investment strategy. It’s a good idea to ask for academic and professional credentials and who influenced their decision to work as a financial advisor.

No one can predict the future, so you should be wary of financial advisors who say they can determine the movement of stock, bonds and other investment instruments.  Instead, look for answers that indicate the advisor watches the market carefully and invests their clients’ money with prudence and caution.  Investment performance is a matter of forethought and preparation, not prediction.

How Do You Invest Money for Your Clients?

Good financial advisors establish a process that can be retraced, and you should make sure that your financial planning goals and objectives are carefully documented. Rather than going with an advisor that works alone, consider working with a larger firm, where a team-based approach gives you a backup if your advisor moves or retires. Whoever you work with, make sure they understand the intricacies and seasonality of your practice so that they can help you time your investments appropriately.

What is Your Educational Background?

Some credentials are a good indication of your advisor’s competence. Financial planners should have broad experience and a Certified (CFP) certification is the most meaningful credential in the field.

Another relevant credential for someone investing your money is the Certified Financial Advisor (CFA) credential. These certificates take time and effort and cover the basics of the industry as well as the legal and ethical ramifications.

What is Your Process When Working With Clients?

You ask this question to gauge the advisor’s experience and competence. Qualified advisors should launch into detail if they are passionate about what they do and how they protect and serve their clients. Not everyone will have the same process and philosophy, but good financial advisors know why they do what they do and should be able to articulate that.