You've worked hard and saved money for retirement. The last thing you need is to lose the money in a volatile stock market or with an investment professional that may not understand your unique situation. You need someone who understands the market and will work with you to create a plan that reaches your financial goals.
Don't hire the first person who is recommended to you.
Take time to interview several financial professionals before making a decision of who will invest your money. Below are seven questions you should consider asking them. If anyone can't (or won't) answer questions to your satisfaction, he or she may not be the best match.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
1. Can I ask you a few questions?
Seems ridiculous to ask this question, but if they're not open to talking to you about how they operate their business, their training and background or investment style, they may not be open to answering questions about how your money is invested. It might be better to find someone else who is willing to answer your questions.
2. What's your investment philosophy?
You're investing your future with this company and person, so it's important you can talk to them in terms you both understand. If they put money in what seem like complicated investments, you will likely have an uphill battle to decipher the basic elements of your account. It's better to have someone who has a similar philosophy to your own and can explain what they're doing in a way that makes you comfortable.
3. Are you fully licensed?
If they're only licensed for insurance, it's likely they will only recommend insurance products in a financial plan. While that may make sense for your portfolio, it may not be the best option. When a financial adviser is fully licensed it means they have securities and insurance licenses and are required to have ongoing training. For example, I am fully licensed, which means I have Series 7 and 66 and am allowed to sell nearly any investment. I also have a life insurance license, which allows me to sell life, long-term care and annuities.
4. What kind of continuing education do you practice?
It's important to be constantly learning, especially in this field that can change with the stock and bond markets as well as the law. As a fully licensed professional, I have the Accredited Asset Management Specialist (AAMS) designation, which requires that I have tenure in the industry, additional continuing education and subscribe to a code of ethics.
5. How do you get paid?
The financial industry does a good job of confusing people about how we get paid but that is not our intention. In fact, if you're confused at the answer you get to this question, that person may not be right for you. As a fully licensed financial adviser, I typically get paid in one of three ways, depending on the services I provide to the client: via a commission for the products I sell, a money management fee as a percent of assets under management or a financial planning fee for creating a plan you will execute.
6. How do you invest in yourself?
It's my belief and practice that I have to take time for myself and my family so that I can best serve my clients. If I am always working, it can feel like I can hardly breathe, and I am not enjoying my work. Taking breaks and vacations helps reset and renew so that I can truly focus on what I love—helping my clients reach their financial goals.
7. Why did you become a financial professional?
The answer to this question tells you how passionate they are about their work and connects you to them in a personal way. I became a financial professional to help women understand money and investments in a way that wasn't available when I was growing up. I want you to have education about what's right for your personal financial future. That truly matters to me.
When I sit down with prospective clients, I want to get to know them and I want them to know me. Whether you work with me or someone else, it's important that you are comfortable and understand what's happening with your investments. You've worked hard and your money should work for you in ways that make sense for your financial goals. Don't be afraid to ask questions before hiring a financial professional.
Shanna Tingom is the co-founder of Heritage Financial Strategies. Her specialty is working with female entrepreneurs, business leaders and individuals experiencing life transitions.
Shanna Tingom is a Registered Representative, securities offered through Cambridge Investment Research, Inc., a broker-dealer, member FINRA/SIPC., Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Adviser.
Cambridge and Heritage Financial Strategies are not affiliated.
-
The $33,000 Retirement: One Man's Surprising Path to Financial Freedom at 61Forget what society tells you, even with less than $1 million, you can be happy in retirement.
-
The Best Aerospace and Defense ETFs to BuyThe best aerospace and defense ETFs can help investors capitalize on higher government defense spending or hedge against the potential of a large-scale conflict.
-
Roth IRA Conversions in the Summer? Why Now May Be the Sweet SpotConverting now would enable you to spread a possible tax hit over more than one payment while reducing future taxes.
-
A Financial Expert's Three Steps to Becoming Debt-Free (Even in This Economy)If debt has you spiraling, now is the time to take a few common-sense steps to help knock it down and get it under control.
-
I'm an Insurance Expert: This Is How Your Insurance Protects You While You're on VacationHere are three key things to consider about your insurance (auto, property and health) when traveling within the U.S., including coverage for rental cars, personal belongings and medical emergencies.
-
Investing Professionals Agree: Discipline Beats Drama Right NowBig portfolio adjustments can do more harm than good. Financial experts suggest making thoughtful, strategic moves that fit your long-term goals.
-
'Doing Something' Because of Volatility Can Hurt You: Portfolio Manager Recommends Doing This InsteadYes, it's hard, but if you tune out the siren song of high-flying sectors, resist acting on impulse and focus on your goals, you and your portfolio could be much better off.
-
Social Security's First Beneficiary Lived to Be 100: Will You?Ida May Fuller, Social Security's first beneficiary, retired in 1939 and died in 1975. Today, we should all be planning for a retirement that's as long as Ida's.
-
An Investment Strategist Demystifies Direct Indexing: Is It for You?You've heard of mutual funds and ETFs, but direct indexing may be a new concept ... one that could offer greater flexibility and possible tax savings.
-
Q2 2025 Post-Mortem: Rebound, Risks and Generational ShiftsAs the third quarter gets underway, here are some takeaways from the market's second-quarter performance to consider as you make investment decisions.
