Question for the experts: How do I find a financial advisor whos not clueless?
Kristi Reimer is editor of dvm360 magazine and news channel director for dvm360.com. Before taking over
A dvm360 reader wonders if there are experts who understand the plight of veterinarians with student loans.
If this is the response of the financial planners you meet with, you're not alone. (Gribanov/stock.adobe.com)Recently the dvm360 team received this query from a veterinarian, not long after we launched our dvm360 Leadership Challenge on student debt:
Can any of the student debt authors or consultants offer some guidance on how to find a financial advisor? Where do I find a list? What do I need to ask them to ensure their expertise and that they'll have my best interest in mind? What's normal as far as cost and payment plans when working with financial planners?
There are many articles and CE presentations that discuss general options for handling debt, and they typically conclude with “get help from an expert.” I've met with a couple of financial advisors who were recommended to me, and I didn't get the feeling they truly understood graduate student loans. It didn't feel comfortable signing on with them, even after meeting with each a couple times. After these meetings, I've found it difficult to know where to find someone. A general search for “financial advisors” in my area gave me results for things like banking institutions!
Unfortunately, this veterinarian's plight is far from rare, says Tony Bartels, DVM, MBA, a veterinary student debt expert with the VIN Foundation. In fact, her question is one of the most common ones he receives when speaking or writing on the topic. And the answer, like so many things in life, begins with, “It depends …”
Specifically, it depends on what the veterinarian wants the financial advisor to do. “It's like when vets recommend that someone see a specialist-they're going to steer them toward a specific specialty depending on the ailment,” Dr. Bartels says. “For example, if the pet has skin issues beyond the purview of a general practitioner, they're going to recommend a board-certified dermatologist.”
Generally, veterinarians who seek out financial advisors think they're going to find someone who's good at everything, including student debt, and that's simply not the case, Dr. Bartels continues. There aren't actually that many advisors who are well-versed in student loans and repayment options-particularly with the level of complexity present in veterinary medicine (translation: significant debt with relatively low incomes).
“That's a unique set of challenges,” Dr. Bartels says. “If those advisors aren't specifically educated in federal student loan repayment options, the veterinarian is not going to get the advice they're looking for.”
Dr. Bartels encourages veterinarians to be their own best advocate when it comes to student loans. “That's why we built the resources we did at the VIN Foundation,” he says (see vin.com/studentdebtcenter). “They can get an idea of the repayment plan they qualify for and what their options are, and that's where a financial planner comes in.”
For example, if a federal loan repayment plan involves a tax on the amount forgiven after 10 years, the advisor can help you save for that. “That's what financial planners are really good at,” Dr. Bartels says. “They help you formulate a plan for a targeted savings goal, whether that's retirement, tax forgiveness, etc.”
Once you've done your homework and know what you'd like your financial advisor to do, look for a Certified Financial Planner (CFP), Dr. Bartels advises. These are individuals who have gone through training, passed a series of tests and are obligated to act as your fiduciary, which means acting in your best financial interest-it seems like that should be a given, but it's not, unfortunately. “Lots of financial planners make a living selling products that are commission-based, so they have an incentive to sell,” Dr. Bartels says. “Those may not be the best products for the person seeking advice.”
The CFP database at letsmakeaplan.org can show you advisors who are near you, but there's still no guarantee that they're going to be an expert in student loans. “You might find a CFP with an interest in student loans, but you don't stumble on those very often,” Dr. Bartels says. “That's why I suggest doing your own research on student loan repayment options.”
CFPs are generally fee-based planners, Dr. Bartels continues. It's just like when a pet owner brings an animal to the vet and pays a fee for knowledge and services depending on the level of complexity and expertise required to assess and treat that problem.
“When I do lectures with students and veterinarians, they often ask, ‘Why can't I just pay someone to do this for me?'” Dr. Bartels says. “Well, there's not one person who can do this. If you go in and vomit your student loan history onto their desk, you're going to get a commensurate recommendation.”
In the end, there's no way around being your own advocate, Dr. Bartels says. You have to understand your situation and your options in order to assess the value of the information you're getting. “There's homework associated with your student loans, and then you can start to fine-tune the plan you're creating with a financial advisor,” Dr. Bartels says. “I tell folks that if they can get through vet school, this is easy.”