HOW-TO determine the level of financial advice you need.

Not all advisors are created equal. Not every client should work with every advisor and visa-versa. Question is, how do you know? Here are some tips on how to determine what you need. There are 3 level of financial advice; general, specific, and unique.

General: Think of this type of advice as your general practitioner or your general contractor. I am sure most would agree that these are both very important roles. It is not because it is general that it is not good. Sometimes this is all we need. If you know you have financial pain, however, do not know what is wrong, you should seek out a generalist, someone who can have a bird's eye view and tackle your problems from many different angles. I was referred a prospective client from one of my mortgage brokers who was having an issue with his insurance coverage while on disability. The client is a business owner and was having some financial issues in his business. As his income decreased he contacted his insurance professional to find a solution. Since this person only provides insurance advice, they modified the contract to fit within the client's new temporary budget. Now that the client is on disability, he is feeling tight right now. I asked him if he explored any other solutions such as borrowing money, taking some funds from his investments, or taking some funds out of his business. None of these ideas were explored. Disability is like air for a business owner, you spend the most you can on this and should reduce this only if all else fails.

This is the problem with financial advice, the problems only show up when your plan must be tested. At that point it may unfortunately be too late. When you work with a financial professional, be aware that many of the solutions may only be tested much later in the future. This client may have issues to qualify for an increase due to his claim. He may not be able to provide the financial underwriting to reestablish his initial coverage need. All this to save some money at the end of the month. The client is not satisfied with his current provider as he feels let down. It has to make sense.

How could this have been avoided? How can you protect yourself? Look for someone how has multiple licenses or disciplines. Someone who can view your problems from various places and can act on those recommendations. If the person you initially met cannot find solutions, do not be afraid to challenge, question and seek a second opinion.

Specific: This person is specific to one part of the financial spectrum, only life insurance, only group insurance, only investment advice. When you are reasonably confident that your problems are caused by your group insurance contract or your life insurance premiums then you can contact one person for that specific need. When your pipes are leaking you need a plumber, however, considering the previous case the client felt his disability was too expense without considering the longer term impacts.

You should have a good command of personal or corporate finance to work with a specific role. You should possess a wealth of experience with various financial issues and be quite confident you know what your true issues are. I have run into some prospects who believe they know what they need and are very resistant to consider other alternatives. You may have yourself convinced, however, life takes us on a roller coaster. Listen to the professional, you may learn something.

Usually most advisors can be generalist and specific. This may seem like an oxymoron at first sight, however, specific does not mean exclusif. They have a wealth of experience that can be used for an overview or role specific. For example, a general contractor may be able to supervise a site as he may be able to install flooring or Sheetrock.

Unique: if everyone around you is just like you, they have the same issues and are in a similar financial situation, you may be able to bypass and go straight here. You knows your stuff. This person posses a command on their finances and have been down the road many times.

This type of advisor works a in niche market. More and more advisors are being told to offer unique advice in order to gain success. It is easier to market to a very targeted audience. Anyone who has done digital marketing can understand this. However, this person can never become the "one call" relationship as they only do one thing. They are able to help the same type of person with the same type of problem. If you fit into their box great, if not, move on.

Business owners: If you are a business owner, make sure you are dealing with someone who has tax knowledge. Furthermore, this person should understand your structure and help put plans into place to take advantage of various strategies. This person should have a network of professionals to refer you to look over and make general recommendations to ensure you have the right level of advice as well as people to execute your plans. By asking the prospective advisor of their structure may help you understand if they are the right fit for you. One of the complaints I hear the most often is how business owners want to grow and their current professionals cannot help them. Another issue I have seen myself if how the business out grown their financial institution, or accountant. You need a process you can grow into, not grow out of!

I want to be the CFO of your financial life, the "complete family office". I do not want to be the "one stop shop" I want you to know I am the "one call shop". You need access to a network of professionals than can help. This is the essence of what I am building everyday. Please comment and share. I would love to hear what you think about this or any of my other articles. Movative, moving forward.