With turmoil in the financial world – inflation, bank bankruptcies, recession concerns, etc. – you may have reached the point that you want to check in with a professional advisor. If nothing else, it may calm any anxiety about your future.
Common questions I hear as I speak to audiences across the nation are: Am I on track? Will my savings last through retirement? Do I need to adjust my investment mix? How do I address unknown risks? Am I spending too much?
No matter your age or your accumulated assets, getting help and insight from a professional is a good idea, especially if your concerns are taking a toll on your quality of life.
If you choose to use an advisor, it is important to find someone you trust who will take the time to know you and answer all of your questions in terms you understand… and someone who is a fiduciary.
A fiduciary is bound legally and ethically to put your interests first. That is not a universal requirement in the industry. Being a fiduciary is the highest legal duty of one party to another. It is a higher standard of care.
How do you find an advisor who is a fiduciary? Look for a Registered Investment Advisor (RIA) or a CERTIFIED FINANCIAL PLANNER ™ professional. You can search for an advisor in your area who is a CFP® professional at the following website: www.letsmakeaplan.org.
One of my recent blogs described the difference that a CERTIFIED FINANCIAL PLANNER™ professional brings to the table. See Extra Retirement Plan Catch-Ups.
Let’s imagine you have decided to hire a professional and have narrowed your search to several CFP® candidates you found in your area using www.letsmakeaplan.org. What should you do next?
I suggest you schedule an appointment with two or three possible financial planners in your area. The following questions may help you decide which advisor is the best fit:
If you choose an independent advisor, a RIA, it is also important to ask: “Where will my assets be held?” A Registered Investment Advisor should not mix your assets with other clients’ assets. They should create separate accounts for each client and use a third-party custodian, such as Pershing, Schwab, or Fidelity, to hold the assets.
When there is a third-party custodian, you can expect to receive two statements: one from your advisor and a separate one from the custodian. The two should reflect the same information. The statements from the custodian should clearly show that you are the owner of the account.
Why is a separate custodian important? Unfortunately, there have been instances of advisors mixing client funds with their own and then using the funds for themselves. An unethical advisor may create their own client statements with false information, and if there is no custodian statement for comparison, the situation could go undetected.
Before you select a particular advisor, it is also a good idea to check their background, work history, and any client complaints. There are two sources for that information.
Any important decision requires research and, especially when it comes to your money, take your time to make a wise advisory choice. Compare your options and make sure you and your spouse or partner are on the same page.
Do not be pressured into a decision. Ask questions and make sure that you will be comfortable with the advisor you choose. Not only do you want someone who is knowledgeable and ethical, but also someone who you trust to deliver both good and, if necessary, bad news.
Do you currently use a financial advisor? Are you happy with your advisor? How did you choose him or her? Do you know if your advisor is a fiduciary?