How to find a financial planner to help you start planning your financial future

Brittany Castro, CEO and founder of Financially Wise, Inc., talks about how you can find a financial planner so you can plan your financial future.

Finding a financial planner is the first step in learning to invest.  You have to know what you have, what you owe and get a baseline look at what you have to work with.

Interview transcript

Sherold: Brittany, thank you so much for being here with me today. I recently asked my subscribers what they wanted to know most about money. And they wanted to know how do they get started with investing. I thought it was important for those women who haven’t saved a lot to know that going to a fee-for-service financial planner is a great first step.

Brittney Castro is the founder of Financially Wise, Inc., an LA-based financial planning firm whose mission is to teach individuals and couples the art of managing money, the fun and simple way.

Brittney is a certified financial planner, a charter retirement planning counselor, Accredited Asset Management Specialist, entrepreneur and speaker.

She wanted to work with clients the same way she talks about money with her friends — in a fun personal, compassionate, relatable and non-judgmental way.

That’s why she created Financially-Wise in 2013 as a financial planning firm with services, ranging from the only financial planning online money courses, financial wellness workshops, speaking engagements, and brand partnerships.

Sherold: So welcome, I’m so thrilled to have you here. First of all, why don’t you tell us a little bit about what you do with clients? And then we’re going to launch into some questions specifically to help women who are interested in taking their first steps in financial planning,

Brittany: Okay, so I really started this firm as an only financial planning firm, so the typical work that we do with clients that hire us for either one month initial package or three months and it just depends how comprehensive they want to get.

So in the beginning, we have a data meeting where we literally just collect information around what do they want to achieve, what’s the financial situation right now — assets, liabilities, insurance and then we build a strategy with them that covers everything.

So looking at how much do they have in their cash accounts and do they allow for a cushion or travel or short-term goals like buying a home or a second home or launching a business.

We review all their insurance needs, disability life insurance and help educate them on what they might need at whatever stage of life they’re in.

Then we also look at their investments. And how does that relate to their retirement goals, what else do they need to be doing and how do they manage the money within the investment account and are they on track? What tax strategies need to be incorporated into the mix?So we look at everything.

Our purpose is to educate and empower clients. We don’t sell products. We don’t even manage the accounts. That was something I decided not to do when I started this company in 2013, mainly because I’m not traditional. I wanted to do a lot of the speaking and advocacy work that I do now, just around financial literacy.

But really, I think it’s also the shift in where we’re at with the economy. People understand fees more than ever before, they’re looking for somebody who can just really either partner and guide them and that’s what we do. We help build their budget, and teach them how to use it. We’ll help them open the accounts, and get those up and running or connect them to the insurance people if they need to get quotes for something.

Sherold: Do you refer them out for investing?

Brittany: Yes, so up until now we’ve been referring people out just to specific people who might be a good fit for them or sometimes we refer them to online platforms that will do the investing for example, robo-advisor.

When they’re just starting out, we really like low-cost institutions like Vanguard or we talk about robo-advisors. We’ll ask them, “Do you have somebody that you’re currently working with that we can now incorporate the plan with?”

I’m definitely turning away business because if we manage the money, there’s a whole different revenue stream, but I think it’s also nice because clients really know we’re sitting on the same side of the table. I really believe, especially with women, they need that more than ever before.

Sherold: Let’s talk about that because women are nervous about how to start investing. And one of the questions I had was, how do financial planners charge?

Brittany: Okay the way I define it, there’s three things.

There is the financial professional who basically works at a bank or insurance company. So usually they’re getting a commission for the products they sell, and part of their salary comes from commissions on the products that they sell you. So there’s wrong with that. Everybody needs to earn a living but they might be limited to only recommending the products of that company. They’re not able to get you products outside of that company, so that’s one scope.

I think the other main way is investment people who take a cut of the portfolio. So there’s a percentage that they charge to manage your account depending on the account size. So typically those people are managing your account, recommending an allocation maybe meeting with you every so often open to review that. They will talk to you about budgeting or maybe insurance but because they only get paid on commission for investing, they typically only stay in the investment side.

And then you have someone in the middle, like financial planners that can work a few different ways. So as a financial planner, if they have their own company like a registered investment advisory, usually they’re a charging some sort of flat fee for advice like I do or it’s a combination. So they’ll say, we’ll manage the portfolio and within that management fee, we’ll also provide you financial planning guidance such as helping you with your budget plus help you get the right insurance in place. They’re not taking commission, they’re just getting that fee but they are more comprehensive. There’s no one right way.

But I strongly believe that you need to work with the Certified Financial Planner because I think the CFP designation is important. This designation distinguishes the financial professionals who have gone through more school and education. Only 20% of the industry has that credential.

There’s an extra layer of fiduciary responsibility as a CFP and the fact is usually they just have more expertise because they’ve gone through all of this extra work to get the designation. So I think starting with the CFP designation is huge. And then really just knowing how does your advisor get paid. They should easily answer that question.

If they can’t answer the question, I think that’s a red flag. I think that is really something you should be looking at if they can’t tell you how they’re paid, because there’s even if you get commissioned, there’s no problem.

They need to explain to you for example, “I get paid from the insurance company to sell you this product right telling about.” There’s no issue there, but if they’re kind of not telling you clearly, I think that’s just something to look at on that subject.

Sherold: What else should they watch out for?

Brittany: Yes, another thing that I hear often from our clients is that people just didn’t call back or they’re not responsive. Like for example, a lot of times you get your investment accounts set up with someone at XYZ financial firm and you’re paying them 1% but they’re not doing anything, meaning they’re not even giving you review meetings, or barely reach out to you because when they manage your account they get the fee. There’s no unless you ask for that, they don’t really need to, right?

So I think that’s another red flag, if you’re not able to get review meetings at least once a year. They should be proactive on their end, and you need to feel that your person is responsive to you and really listening. Especially for women, because they feel like they’re not heard by finance professionals. They don’t understand how to talk to women in a way that’s empowering.

I think that as a woman there are many amazing financial people out there who can help you that won’t talk down to you and won’t make you feel stupid or afraid to ask the questions. You might need to dig a little bit to find that person.

You might need to go to meetings and interviews before, but they’re out there. And I think as a woman that’s part of it, not being afraid or not being shy to tell your person. Look, I need you to communicate with me in a certain way, or I need you to be responsive.

And if they can’t do that, I tell them then it’s probably time to move on and that’s okay, right?

Sherold: I’ve even had women with MBAs in my money class, and they’re embarrassed about how they’ve handled their money. There’s so many layers of shame about how women feel that aren’t good enough when it comes to finances.

I asked friends who they used as a financial planner and that’s how we found the woman we work with.

Brittany, you’ve talked about how financial planners get paid for their service, is there a minimum amount of money that a woman needs to come in with? Would it be a smart idea for a woman to go to a financial planner and look at asset allocation, how much they have right now, how much debt they have and look at a budget and kind of scan out to retirement?

So the question was, is there a minimum that you must have to work with an investment manager?

Brittany: Yes it depends. The investment manager could be a financial planner. So I think it’s just kind of doing your homework and seeing… Do they have minimums on the website? There’s another search engine that I really like, FPA – Financial Planning Association.

So for example, if you want a woman or if you want somebody who works with couples or business owners or let’s say you’ve got a search and see if they have minimums or no minimum. And also on that site, it shows them how it shows how they get paid.

Okay, so there’s amazing search engines out there so you don’t necessarily need a minimum — like we don’t require minimums — because as long as you pay for our classes, we can help you, right? And there are a lot of advice only planners who work like me. You just have to find them.

The other website that’s really good is National Association of Personal Financial Advisors (NAPFA), and that’s just only planning. So I think there’s someone for everybody. You don’t have to have a minimum. And I always say you need to pay for the advice because you need to pay for financial education. I just told a good friend of mine, super smart woman got all these stock options and she was like… I know, I know I need to pay, but I have this thing about paying for financial advice. Because what’s the return going to be?

I’m like, “Are you kidding me, I pay for advice. You have the money so go get professional help. You’re not going to be able to figure out stock option tech strategies on your own. Are you kidding me?

As professionals, we need to do our homework when we’re talking with clients about that. So I think you have to be willing and get in the mindset that you need to pay for advice, and you can find somebody you feel comfortable paying for the advice.

Don’t even think that way because that’s not the wealthy mindset way to think. The wealthy mindset is look, I need to get educated and manage my money. Who is going to be the best person to help me do that? I will have pay that person their fees, if I know that they’re the best person.

Sherold: Absolutely, that’s a great answer to that. It’s so important and you’re right about the lack mentality that holds people back from making smart decisions.

I recently read statistics from the women in the world event that was just recently happened (2019). Women control 30% of the global wealth yet 74% of women lack confidence as investors.

And then what was staggering was to read that 61% of millennial women abdicate control of their finances after marriage. I was hoping that the millennials were going to change this and perhaps they will. I work with the 40-50+ year old women. They’re closer to retirement. But what would you say about what’s happening out there right now with women and finances?

Brittany: Yes, I was just talking about this last night with a group of my girlfriends ’cause we’re all millennials. We were talking about the combination of being an independent woman, but also those in a relationship. And what does that mean, like this new way of modern life? So, for example, my mom was a stay-at-home mom. I think that was a big reason why I wanted to be this career woman and have independence. But now I’m like, I just want to get married.

It looks like for me to balance between being an independent woman and being traditional because I’m very traditional in that relationship sense. I do want a man who’s in there and with me and wants to provide the care in those ways. But the reality is that I know how to make money, and I know how to run a business. That’s a talent I have and it’s a skill and it’s something I enjoy.

And the other woman was telling me how her mom was a career woman, so she immediately got married and had this trophy wife life and it didn’t work for her, she ended up getting bored. And now she’s happy because she’s in this relationship where she can be her powerful self and the work with her relationship and son.

I think the millennial statistic from that study of 63% that abdicate their financial power to their spouse maybe we’re trying to figure out, Okay, how do I be independent, woman? But we also want the relationship, we kind of want it all.

And not that our parents or grandparents didn’t but I think it’s the first time where women, we really can have it all and it’s a little overwhelming. I think it’s confusing right now with dating.

That’s why we changed our name from Financially Wise Women to Financially Wise. That’s always going be there for me because I’m a woman in finance. I could just relate to women on so many levels, but at the same time I was like, “But we work with all these couples too.”

I want to be able to empower both sides like men too. I like men and I think men are equally confused. How do they be a man in this modern world and what does that mean to support a woman?

Because women can do it all and have it all, I think. I think there’s been this burn out specifically, and I think it’s happening now. Everything you see online is, it’s a life with ease because of this burn out. I’m doing too much, I don’t want to do it any more.

I feel good, I could do it, but I don’t want to do it alone anymore. We’re not taught how to take care of our money, how to be good stewards of our money. And I also hope that women like you never diminish their own sense of power because of how much money they make, making more money than the man and those are the roles that are changing.

I told someone, “You know I’m dating someone. “Regardless if it works or not, it’s so great because it’s the first time I feel like I don’t have to diminish my power.” And I didn’t even know that before, but it was because this guy does so much more than me and it’s really attractive. I thought I had to play a part and not showcase who I am and I was like, “Oh no, that’s not going to work for me, because why would I ever hide who I am?

Sherold: I’m really glad that you shared that, and I hope more women and men will have conversations about money. Are there any resources that you would point us to here at the end? I’m mindful of your time. There’s a lot of debt. There’s student loans, or medical school loans or any thoughts?

Brittany: Yes, we’re just writing a whole blog series about that. Actually you can always come find me at financial-wise dot com.

There’s a lot of resources available. So, I dot com is a student loan, refinance credible same thing in there resources out there. There’s a lot of innovative fintech companies in the marketplace now trying to solve these problems of this generation.

So thank you so much! It’s been so rewarding for me to have you and just listen to what you had to say and your own stories as well. I wish you the best.

Resources for this article:

Brittany Castro at Financially Wise, Inc.

National Association of Personal Financial (NAPFA)

9 Best Robo Advisors of July 2019 by Nerd Wallet

Student Loan Debt Relief