Finding someone to take care of your money can be a stressful task. But you want to take your time to ensure you are selecting the right fit. What should you look for when choosing a financial adviser?
Here are a few questions to keep in mind as you seek an adviser to continue planning for retirement.
Are they a comprehensive planner?
When you first meet with a potential financial adviser, what advice are they offering you? Are they talking only about stocks and bonds? Or do they focus on other aspects of your finances like Social Security, taxes and estate planning?
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.
A comprehensive financial planner will help you develop a holistic plan that looks at all aspects of your finances and covers your short-term and long-term goals. Advisers who use a holistic approach will take the time to ask you questions about your financial goals, both now and in the future. This could include everything from legacy planning to charitable giving. You want an adviser who truly understands your hopes for retirement. A holistic plan looks to optimize all aspects of your finances and how they can work together toward those goals. This type of planning will bring you a lot more value and help you navigate complicated financial decisions.
Are they a fiduciary?
A fiduciary is legally and ethically required to make the best decisions for their clients. They will always put your needs first. This may not be the case for many advisers out there. When choosing a financial adviser, you are looking for someone to help manage all of your finances. You want to be sure you can trust them to do that.
A fiduciary cannot recommend anything that does not benefit you. If a recommendation could lead to a potential conflict of interest for your adviser, as a fiduciary, they have to tell you. This could be something as simple as an adviser profiting more from one investment over another. When they are a fiduciary, you know that the recommendations they are giving you come from a place of trust, good faith and legal and ethical duty.
Are they an independent adviser?
An independent adviser is paid a flat fee to advise their clients, and they want to provide you more than a product. This is very different from advisers who work on commission. They make money based on their sales for a third party. Be wary of advisers who work on commission. Their recommendations may be based on sales and not the products or services that are best for you.
Advisers who work for larger firms may be allowed to offer only their firm’s specific products or services. Working with an independent adviser leaves you open to many more options for your money.
Are they a good personality fit for you?
Your values and goals should align with your financial adviser’s. When you leave an initial meeting, ask yourself if you got anything out of it. Your adviser should be able to make complicated financial subjects simple. You might meet someone who checks all of your strategic boxes, but if they aren’t a good fit for your personality – it’s OK to keep looking. This is an important decision, and you want to make the right one.
Enhance your financial future
A recent poll found that about 38% of Americans currently work with a financial adviser, and advisers are the most trusted place to get financial advice.
Planning your financial future is a process that takes years, and you don’t want to make any mistakes. Make sure you are working with the right people who make the best decisions for you and your money.
-
California Fires: How to Recover Tax Records and Other Important DocumentsDisaster Recovery Having your tax records and other vital documents is important for claiming casualty loss deductions that can help with recovery.
-
10 Reasons to Leave Your Heirs a Roth IRAIncluding a Roth IRA in your estate plan has clear tax advantages, which can be passed along to your heirs for years to come. But if passed down incorrectly, your heirs won’t reap the full benefits.
-
Social Security and Medicare Funding: Is the Sky Falling?Social Security and Medicare are slowly running out of money, but what does that mean for the retirees counting on them? Actually, it's not all bad news.
-
What We Need to Do to Protect Retirees' Financial SecurityCognitive decline and aging in general put older retirees at risk of losing their financial security when they're the most vulnerable. What can be done?
-
Financial Planning: Sisters Should Be Doin' It for ThemselvesMore and more women are ringin' on their own financial bells (with apologies to Aretha Franklin and Eurythmics) — but that demands a robust financial plan.
-
Is Money Messing Up Your Family's Life?Parents who discuss money and attitudes toward money with their children are more likely to raise financially successful and responsible adults.
-
Do You Know the Power of Whole Life Insurance in Retirement?Worried about legacy planning, market volatility or where to get cash to cover surprise medical or home repair bills? This little-known tool could help.
-
10 Ways Retirees Can Manage Income DistributionThe goal of a retirement income plan is to make the most of your money while ensuring that it lasts. These 10 strategies can help secure your financial future.
-
Gifting Earlier Rather Than Later Can Reap Big Tax BenefitsEven with Donald Trump's win, the future of the Tax Cuts and Jobs Act remains uncertain, so here's how to make the most of its provisions while you still can.
-
A Frugal Saver's Guide to Spotting Investment CostsSome of the fees that come with buying or holding stocks, bonds and other investments are obvious. Others can hide in plain sight.
