ISAKOV Planning Group Blog
Friday, July 19 2019
How do you choose a financial advisor that will best meet your retirement needs? Here are a few points to consider:
Make Sure Your Advisor Is Working for You! Don’t fool around with this… Your financial advisor must be someone you can trust fully: They must be legally bound to give you advice that is in your best interest, and no one else’s (especially their own). This is not the case with most financial advisors; they may be more focused on earning commissions than on growing and managing your retirement assets to the best of their ability. Ask this person if he or she is a “true fiduciary.” If the advisor is, they should have no problem disclosing the money he or she will make (upfront and long term) with any recommended investment. Related to this question is:
Understand How They Earn Money When Advising You. Good financial advice is valuable. There is nothing wrong with paying a fee to a fiduciary you trust and is providing the results you’d expect from an expert. On that same note, your financial advisor should have no problem disclosing how the fees you pay are spent.
How Many Years of Experience Does Your Financial Advisor Have? Let’s assume you are working with an expert. To attain this level of professionalism, your advisor had to build many years of training and education, and have extensive experience guiding other customers through their retirement. This sounds like a no-brainer, but you’d be surprised how often this question goes unasked!
Check Whether Your Advisor Has Been Sanctioned. No one wants a financial advisor who has regulatory or licensing issues or complaints against him or her. There are easy ways to check to see if this is the case. A free tool that is available on the Web is called , which is maintained by the Financial Industry Regulatory Authority. Also, do they have the certificates (such as a Certifed Financial Planner) that they say they do? If you’d like to take a closer look, the organizations who issue certifications or licenses maintain their own websites that consumers may use to check creditials.
Your Financial Advisor Should not Hold Your Money or Investments. Firms that invest your money and hold onto it are not necessarily a situation that must be avoided at all costs, but if they do hold your money, know that there is a greater risk for fraud or embezzlement. A custodial firm is a far better situation. You’ll sleep better knowing that a firm like Fidelity or Schwab is holding your money, and a separate financial advisor is managing it.
Ask Your Advisor to Create a Retirement Income Strategy. Most often, when you invest before retirement, you are seeking to maximize the growth of your money while considering the amount of risk you believe is acceptable. Once you retire, that may not be the case. The goal may be to ensure stable income through your retirement years. If your financial planning professional says that he or she can devise such a plan for you, make sure that you understand the approach fully (and therefore can avoid unnecessarily risky investment options). Just as importantly, don’t believe an advisor who tells you that there is no risk or that he or she has eliminated all risks. Financial risks can only be minimized, almost never eliminated (think of putting your money under your mattress!). Your advisor will serve you best by explaining the risks fully and discussing with you whether they are worth taking.
You’ve worked too long and saved too much to be uncomfortable with how your money will be invested once you retire. This money needs to work with your other income sources (such as Social Security and pension plans) to create a secure living for a lifetime. These simple tips can help you find the right direction for you and your loved one to achieve your financial retirement goals.