Who You Gonna Call?

Seven financial friends everyone should have on speed dial

When it comes to getting ahead financially, it can pay to have a trusted circle of advisers to lean on.

For many African Americans, the legacy of feeling unwelcome in the nation’s financial institutions isn’t ancient history. Economists and academics believe that at least part of the wealth disparity between African Americans and whites in the U.S. can be explained by a persistent distrust of financial institutions among large numbers of blacks. We can overcome these misgivings by cultivating personal connections that go beyond traditional client–service provider relationships. Your aim should be to develop a team that offers service and advice with a human touch. Here are seven financial “friends” to add to your personal, business, and social media networks.

A Personal Banker or Branch Manager
Irvina Mallory, a senior vice president and private banking officer at The Harbor Bank of Maryland in Baltimore, has always stressed the importance of getting to know your banker. “The 1-800 number is a very helpful tool when you are handling run-of-the-mill transactions,” Mallory says. “But you will undoubtedly run into situations where you need to speak with someone. That’s when you need to have a phone number, or e-mail address, of someone who will be responsive to your needs. Because now you are asking for consideration and you don’t want to hear, ‘Well, I don’t know you.’” Mallory says it doesn’t take much to build this relationship. Just go into your bank’s nearest branch and introduce yourself to the branch manager or personal banker. Take a few minutes to tell them about your financial goals. Then, periodically check in with this person to find out about new saving vehicles or loan products. Inform your banker of any unusual financial events in your life or any special needs you may have. If you’re a business owner, invite them to take a tour of your company and share your strategic plans. Your banker could be your advocate within the institution in case there’s ever a dispute with your account, a lost or stolen debit card, or if you’re the victim of fraud. By taking these actions, you might find that your new friend is likely to make you aware of advantageous policies and programs.

A Mortgage Broker
Even with the broad national drop in housing values, your home is likely to be your most precious asset. Because of this, you should regularly look into new options for refinancing your mortgage or loan modification programs that can help you get the most value out of your home. It helps to know a mortgage broker who understands all the loan options that are available. You should be able to contact this person occasionally to discuss interest rate trends, seek help to properly time a refinancing, or learn about lending programs.

A Real Estate Agent
With so much uncertainty in the real estate market these days, it’s important to have an agent in your social circle—someone you trust and who has the expertise to help you achieve your property ownership goals. Take some time to find an agent who knows the market you are interested in and has experience in the specific type of deals you want to make. Even if you’re not in the market for a new home, check in with your agent from time to time. They are often aware of new federal loan programs, local tax incentives, or other deals. Real estate agents are also good resources for learning about home improvement and renovation tax credits. An agent who is willing to go the extra mile for you can also alert you to homes that are about to come on the market before they reach online real estate databases.

A Financial Planner
Everyone should take advantage of the skills and information that a financial planner has to offer, says Jed Michel, a certified financial adviser and the owner of J. Alexander Consulting in Hempstead, New York. “Our finances are much more complex today. Many are asking how to have money for retirement, long-term care for parents, and college tuition for children—all at once,” Michel says. Since your goals are personal, you need to find someone who is trustworthy and connects with you. In addition to sitting down with your financial adviser, you should seek any free financial counseling offered through your employer and your bank. Then you can compare information and use it to help make the best decisions. With the volatile stock market, it’s important to have a professional explain how to invest your retirement funds. More important, a planner can help you determine your risk level and explain the differences among conservative, moderate, and high-risk portfolios. It’s important that your planner have the patience to sit with you until you fully understand the risks you’re taking and what those risks could cost you.

An Insurance Agent
Insurance is a touchy subject that requires a soothing presence to ease the tension. After all, insurance is all about planning for the unforeseeable. There’s no getting around the fact, for instance, that your family needs to be provided for in case of your death. Finding an insurance agent with whom you can talk candidly is vital. “Any agent can generalize what the average person should do, but you need an agent who understands your family history, someone you know will understand how your situation changes if you get a new job or face a sudden illness in your family,” says Roosevelt Elivert, an agent with State Farm Insurance in Durham, North Carolina. At least once a year you should meet with your agent and review all your basic insurance policies such as car, home, and life insurance. You should also ask about coverage for disability, retirement, and long-term care options that can be tailored to your needs. Having an agent who knows you by name is especially helpful when you have to file a claim after a car accident or major disaster such as a house fire. An agent with your interests at heart is likely to work harder to resolve your issue.

An Estate Planning Attorney
People often think of estate planning as a service for the very wealthy, but the laws governing wills and trusts affect us all. Even more, few people understand the difference between having a trust versus a will. A will controls any assets in your individual name when you die, but a trust is used to hold assets during your lifetime. Take this scenario offered by Steve Hartnett, an estate planning attorney in San Diego and associate director of education at the American Academy of Estate Planning Attorneys: Say you create a last will and testament to leave all your assets to your child. Many people think that’s all that needs to be done. But you have a life insurance policy through your employer that you set up before your child was born and you never updated the beneficiary.

Furthermore, you have several thousand dollars in an online trade account and a money market account for which you also neglected to update the beneficiaries. Despite having a will, your child most likely will not get the funds from those accounts. Those funds could go to the beneficiary you assigned before the child’s birth. That’s why it doesn’t hurt to know a good estate planning attorney, says Hartnett. Since each state has a different set of laws governing inheritance and other issues, your estate shouldn’t be left to chance or do-it-yourself wills. An estate planning attorney can help you set up a trust that offers more flexibility and control over your how your assets are managed after you die, or if you become incapacitated. He or she can also help you navigate the complexities of blended family structures.

A Tax Accountant or CPA
Don’t mess with taxes. “There are a lot of rules and regulations regarding individual taxes. If you don’t have a skilled person to maneuver you through, you can get into a lot of trouble,” warns Tanya Branch, a certified public accountant and the president of Tanya S. Branch, CPA, PA in Durham, North Carolina. A CPA who knows you is in the best position to help you legally set up a side business, for example.  He or she can also inform you of the best tax position and legal protections from potential liabilities. “There are so many rules that it’s hard for the average person to keep up,” says Branch. “For example, take the first-time home buyers credit, or the Hope Credit expansion for college tuition, or the Residential Energy Efficiency Tax Credit. A lot of people just missed out because they didn’t know.” Branch says software tax programs are good, but only for simple returns. While most programs will ask you a lot of questions in order to help identify your best tax strategy, they don’t help if you don’t understand the question. A CPA who knows your income history can make sure you understand what taxes you’re paying and why.

Just like the other long-lasting friendships in your life, developing a rapport with these “financial friends” won’t happen overnight. It will take time and patience. But, in the long run, these friendships will prove invaluable.

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