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Should I Hire a Financial Advisor?

By Beverly Bowers April 22, 2023 Managing Money

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.

Who to Choose

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 PLANNERprofessional. You can search for an advisor in your area who is a CFP® professional at the following website:

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 What should you do next?

Interview Questions

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:

  1. What are your qualifications and credentials?
  2. What services do you offer?
  3. Will you have a fiduciary duty to me?
  4. What is your approach to financial planning/investing?
  5. What types of clients do you serve?
  6. Will you be the only advisor working with me?
  7. How will I pay?
  8. How much do you charge?
  9. Do others stand to gain from the financial advice you give me?
  10. Have you ever been publicly disciplined for unlawful or unethical actions in your career?

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.

Background Check

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.

If the advisor is associated with a broker-dealer, use FINRA’s BrokerCheck. If the advisor is associated with a Registered Investment Advisor (RIA), then use the SEC website.

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.

Let’s Have a Conversation:

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?

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Lily Iona MacKenzie

Great advice! What could I expect to pay for a fiduciary financial advisor?

The Author

Beverly Bowers is a retired financial planner who has been solely responsible for her financial life over 25 years. Her passion is to make investments understandable – dispel the mystery and simplify the process. In 2021 she self-published a book, How to Dress a Naked Portfolio, a Tailored Introduction to Investing for Women. She relishes questions from all levels of investors. You may submit questions and sign up for her blogs on her website.

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