Saving for Retirement
In Search of Good Advice
Regardless of your income level or financial goals, there's an adviser out there for you.
By Jeffrey R. Kosnett, Senior Editor, Kiplinger's Personal Finance
July 9, 2007
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Editor's note: This article is adapted from Kiplinger's Retirement Planning 2007 guide. Order your copy today.
There are two kinds of people in the world: do-it-yourselfers and those who rely on experts for help. Most people swing back and forth between the two camps, depending on the subject matter, time constraints and discretionary income. If, for example, you enjoy fine-tuning your car's engine but not your portfolio, or you're simply too busy to tackle your finances, you may want to hire a financial adviser. But where do you start?
That's the situation that Atlanta residents Greg and Michelle Anderson found themselves in two years ago. Greg, a globe-trotting management consultant, and Michelle, a lawyer, were focused on their careers and their then-2-year-old daughter, Mary Claire. They dreamed of early retirement for themselves, college for their child and any future siblings, and maybe a vacation home.
Although the Andersons diligently saved money, accumulating an impressive nest egg of more than $600,000, they had neither the time nor the energy to develop an investment plan to meet their goals. Their savings languished in low-earning bank and money-market accounts rather than growing in more-aggressive investments appropriate for a couple in their thirties.
So Greg and Michelle decided to consult with an investment adviser. They wanted someone to design a portfolio, determine the risk they could tolerate to meet their goals and review their progress regularly. Embracing the same level of detail that they bring to their demanding jobs, Greg and Michelle assembled financial statements, worked up a list of priorities, researched the leading national financial firms and some local independent advisers, and paid some personal visits.
The Andersons' search for good advice took six months, and they made repeat visits to three advisers. A year later, they are pleased with their decision to turn their finances over to Raymond James, a national investment firm, although they have switched to a different adviser within the same local office. That's not unusual. Finding the right person to manage your finances involves much more than money. Personal chemistry is critical -- you want to find someone you trust and respect who will listen to your dreams and offer expert advice on how to attain them.
Greg and Michelle are satisfied that their money is invested more appropriately now, and that they have taken care of their life-insurance and estate-planning needs. Their experience, and the helpful list of questions they developed (see the end of the story), could save you a few steps in your quest to find a pro of your own.
Credentials trump titles
With more than 800,000 people nationwide working as personal financial advisers, insurance agents and securities salespeople, the competition for your business is staggering. One recent count found some 50 financial-professional designations, but only a handful deserve your attention. Those are the ones that require a minimum level of experience (measured in years, not three-day seminars) and education (preferably continuing), and are conferred only after passing a comprehensive exam (hopefully not a multiple-choice, open-book test).