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.
-
80-Year Old Dick Durbin, the Senate’s No. 2 Democrat, To Retire After 44 Years in Congress‘In my heart, I know it’s time to pass the torch,’ Senator Durbin said in a statement.
-
Stock Market Today: Stocks Rise on Good VolatilityInvestors, traders and speculators continue to process the "known unknown" of global tariff-and-trade war negotiations.
-
Before You Invest Like a Politician, Consider This DilemmaAs apps that track congressional stock trading become more popular, investors need to take into consideration some caveats.
-
How to Put Together Your Personal Net Worth StatementNow that tax season is over for most of us, it's the perfect time to organize your assets and liabilities to assess your financial wellness.
-
Bouncing Back: New Tunes for Millennials Trying to Make ItAdele's mournful melodies kick off this generation's financial playlist, but with the right plan, Millennials can finish strong.
-
Early-Stage Startup Deals: How Do Convertible Notes Work?Some angel investors support early startups by providing a loan in exchange for a convertible note, which includes annual interest and a maturity date.
-
SRI Redefined: Going Beyond Socially Responsible InvestingNow that climate change has progressed to a changed climate, sustainable investing needs to evolve to address new demands of resilience and innovation.
-
Here's When a Lack of Credit Card Debt Can Cause You ProblemsUsually, getting a new credit card can be difficult if you have too much card debt, but this bank customer ran into an issue because he had no debt at all.
-
Going to College? How to Navigate the Financial PlanningCollege decisions this year seem even more complex than usual, including determining whether a school is a 'financial fit.' Here's how to find your way.
-
Financial Steps After a Loved One's Alzheimer's DiagnosisIt's important to move fast on legal safeguards, estate planning and more while your loved one still has the capacity to make decisions.
