Trust, But Verify

Since late 2012 I have had the honor to provide financial counseling to our service members generally going to different military installations to talk to soldiers and their families regarding financial issues such as buying a home, saving for retirement, reducing and eliminating debt, or simply creating a budget. On my very first assignment I ever did, I pulled up to the base entrance – a heavily fortified gate and entrance – and was asked to park my vehicle to the side while they ran my ID and searched my vehicle for any contraband. There’s something humbling yet cool about being searched by military police with automatic weapons.

Naturally, other than remnants of a snack left over from my kids or an empty water bottle there was no contraband and I was free to close my vehicle up and drive to where I would be working for the day. This common routine has gone on several times at the same installation particularly.

A few months ago, I pulled up to the gate and was greeted by a soldier whom I’ve come to know and recognize and vice versa. When I handed him my ID he said, “I know who you are, sir, and welcome back.” He then went on to say, “I’m sorry sir, but I’m going to have to ask you to pull your vehicle over, open the doors, hood, glove box, console, and please turn off your engine.” He continued, “I know you’ve been here many times, but we have to follow protocol.”

Naturally, I don’t argue and am more than happy to comply. I’ve built rapport and trust, but they still have to verify.

The same is true with your financial planner, insurance agent, advisor, or other professional. It doesn’t hurt to verify things they say or reports they give. I’m not saying to never trust them or be leery, but I am saying it’s ok to check up on their work, advice and numbers every so often.

For example, I’ll encourage clients to check me out independently of our website or what I’m saying. One of the first places I recommend is www.brokercheck.com which is an excellent way to look at a financial advisor’s history, record and possible affiliations with other companies. If he or she is a CFP®, ChFC®, CLU®, etc., verification of their designations can be found at www.cfp.net for the CFP® and www.designationcheck.com for the ChFC® and CLU®.

Verifying numbers and returns can be a bit trickier, but certainly doable. It never hurts to investigate yourself or if you feel comfortable, getting a second opinion. Ask questions about gross versus net returns, fees, expenses, and compensation. Visiting www.morningstar.com is another great way to investigate recommended mutual funds, stocks, bonds and portfolio allocations.

Finally, it never hurts to trust your gut. If something sounds too good to be true it usually is. If something just doesn’t sound right, it’s probably wrong. If something doesn’t make sense to you, it probably doesn’t make sense. And if the advisor, agent, professional can’t explain how the product works or how they get paid – run.