How To Find a Financial Advisor

How To Find a Financial Advisor

A qualified and experienced senior financial advisor can make your life easier by taking the confusion out of money management. There are plenty of upstanding financial professionals, but there are also scam artists who target seniors precisely because they’ve spent a lifetime building a nest egg. The AARP says people over age 60 make up a disproportionate number of investment scam victims. But with the right approach you can avoid scammers and find pros to help make your retirement more secure.

Get references from people you trust

A good rule of thumb is that you should be the one to make the first contact with a retirement planner, not the other way around. Be suspicious of calls offering senior financial planning services, ads for free lunch deals, and “urgent” mail promising great returns on “secret” investments. Reputable financial planners don’t need high-pressure tactics to bring in business.

Ask people you trust who they trust with their money. Keep a list of their recommendations and use it as your starting point for the research that follows.

Find out what their credentials mean

There are dozens of certifications available to financial advisors. Some require years of education and rigorous testing. Others are not so challenging. Visit the planners’ web sites and note which credentials they list. Then look up those credentials to see how valuable they really are.

Certified Financial Planners (CFPs) are the advisors most often recommended by finance publications such as The Wall Street Journal and Kiplinger’s, based on the amount of training and testing CFPs must undergo.

Narrow your list down to the planners with accredited credentials and check those people out in more detail.

Run a background check

The Financial Industry Regulatory Authority runs a free service on its website called BrokerCheck. When you enter a broker’s name and location, BrokerCheck shows you his or her work history, qualifications, and any customer disputes on record. If the advisors you’re considering also offer insurance products, check with your state’s insurance board to make sure they have current licenses and a clean record.

Get in touch

Now you should have a list of qualified planners with clear backgrounds and current, reputable certification. It’s time to request a phone chat or in-person meeting with each of them.

The first thing to know is whether a particular planner can work with you at all. Some firms and advisors have a minimum asset requirement — as much as $500,000 — in order to take on a client. If your nest egg is smaller, ask up front if the retirement planner can work with you.

Find out what their specialties are. You want someone who understands the needs and challenges of seniors and retirees. If you’d prefer to have one point of contact for as much of your personal finance as possible, you may want a planner who also offers insurance.

Look for compensation plans that reduce a possible conflict of interest. In general, fee-based compensation is what financial pros recommend. Fee-based means that the advisor is paid a percentage (usually 1%) of the investments he or she manages for you each year. If your investments gain value, the advisor makes more money. If their value drops, so does the advisor’s compensation.

It’s also important to know if the planner is a fiduciary. A fiduciary is required to put clients’ best interests first always, while other advisors only have to offer options that are suitable in general.

Senior financial planners who are paid on commission are more likely to have a conflict of interest, especially if their only compensation comes from commissions. Insurance policies are usually sold on commission, but ideally investment management like mutual funds and stocks would be paid for by fees.

Hourly pay is another way that some financial advisors get paid, and it may be your only option if your nest egg is very small.

Find a good listener

A good retirement planner will tailor a strategy to your needs, assets, and risk tolerance. Especially if your career years are behind you, it’s critical that your advisor not take unnecessary risks with your investments.

A face-to-face meeting every year is the starting point. If you have more questions or are undergoing a major financial transition like selling a business or home then you will need to be in touch more often. The best planners are accessible and ready to answer questions when you need them.


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Casey Kelly-Barton is an Austin-based freelance writer whose childhood was made awesome by her grandmothers, great-grandmother, great-aunts and -uncles, and their friends.

7 Comments

  1. Excellent tips! Financial advisors have their own specialisations. Find someone who’s real and honest. You know that you’re dealing with a real financial advisor because he values your time and understands where you’re coming from. Thus, he will tell you frankly on your first meeting (which is always offered free) if he can help you or not so as not to waste his and your time.

  2. James curtin March 4, 2016 Reply

    Finding a financial advisor is placing trust in someone who may be a part of your life until long after you’re gone. They can show you how to use your resources wisely, avoid mistakes that people make everyday, and take advantage of opportunities you never realized were there.

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