If you are starting to get worried about your financial future and retirement, a financial advisor could help you meet your financial goals. You will want to make sure you do not outlive your money so you will want to have a nice nest egg to last 20 to 30 years past your retirement age. An advisor, also known as a certified financial planner (CFP), can increase and diversify your investment portfolio.
Before you hire your first financial planner, you will need to understand the different ways they are paid and where to find credible CFPs. You can find several in the Lexington area, if you know where to look.
Financial advisors can do more than manage your investments. They will assess your level of risk and make recommendations based on your age and the age you plan to retire. Some financial advisors also manage their clients’ money and trusts. Since you may need a financial planner for more than one service, consider choosing one as early before retirement as you can.
If you have a financial planner you use on occasion for advice, contact them when you are faced with a major life event, such as marriage, divorce, or death of a spouse, in order to see how this may affect the trajectory of your financial goals.
You can find certified financial planners in the Lexington area through the following resources:
The CFP Board of Standards lists certified professionals with their credentials from across the country.
The National Association of Personal Financial Advisors (NAPFA) hosts a database of fee-only financial planners that you can search by name or location.
Before you hire a financial advisor, verify their credentials and references. You can use the CFP Board’s website to research prospective financial planners. The site lists certification status, bankruptcy history, and any disciplinary action the Board has taken against the CFP. If your friends and family recommend any financial advisors to you, use the website to research those CFPs as well to confirm their credibility.
During your interview with the independent financial advisor, or the brokerage firm the advisor is employed through, have the financial planner explain the pay structure to you. CFPs are paid a number of different ways:
Fee only – Financial planners may charge an annual fee based on your holdings and your portfolio’s performance throughout the year.
Commission-based – Advisors can earn a commission off of the investment products you purchase through them.
Combination of fees and commissions – Financial advisors providing a number of services may charge fees and earn commissions depending on the services you use.
To avoid conflict of interest where commissions are concerned, confirm that the advisor is a fiduciary and must place your best interests above their own monetary goals.
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