February 20, 2007

Chemistry and Credentials

Anyone can call themselves a financial planner or advisor. Who can you trust?

Well. You want someone you like. Without chemistry, you're not going to build an open trusting relationship.

Surprisingly (or not), patients are more likely to sue a doctor they don't like for malpractice even if a doctor they do like is at fault. Malcolm Gladwell reports on these eye-opening findings in his book Blink! The Power of Thinking Without Thinking.

There's a problem with salespeople in general: they have a gift for creating chemistry. Unfortunately, that doesn't mean they have the technical skills to really help you. That's where credentials help. Generally speaking, you'll want to deal with a
  • CFP (Certified Financial Planner), or
  • CLU (Chartered Life Underwriter)

Click on the links above to find out more. You can learn about other designations here. The list is long.

Quick, what's a CFDA? That's a Certified Divorce Financial Analyst. (I didn't know either.)

What About Experience?
You'll encounter potential advisors who have no relevant credentials but who claim to have years of experience. They argue that experience is more important than 'book learning'. Are they right?

Yes and no.

Experience is indeed important. We recently hired an electrician to install lighting in our kitchen. He had 30 years of experience. Surprisingly (or not), the work wasn't as straightforward as expected. But he knew what to do. He had the tools. He had the techniques. The results were remarkable.

He also had current accreditation.

That's the ideal: chemistry + credentials + continuing education.

What do you think?

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