All your life you've been working and saving your money wisely, looking forward to having retirement without financial worries! Then one day, you have a chance meeting with a man who introduces himself as a Financial Adviser. This starts you wondering whether he might have some valuable information for you, so you start listening to him with increasing interest. After all, who among us, wouldn't like to know how we can make our money grow?
How Do I Find The Right Financial Advisor For Me?
Then, after explaining his business, he starts inquiring into your personal financial situation, and asks what type savings plan you have. Now this is where he's about to get you "hooked" and you could be headed for trouble, or you could take a second, to really consider what he's talking about! Before you make any commitment, tell him you need time to consider all of this.
If he's on the level, he'll be agreeable to this; give you his business card and tell you to call if you want to talk some more about making investments. Should he not be a "straight talker," his reaction to your delay should alert you to the fact that he should be avoided.
If you are considering investing your retirement savings, ask around among friends and family. You need trustworthy recommendations, but it may take a bit of research until you find the right financial counselor for you. Be extra cautious concerning your finances as there are too many fraudulent "advisors" waiting to take advantage of someone who isn't knowledgeable about investments as he or she should be!
Watch Out For The Invitation For A Free Lunch
Senior investors are especially vulnerable to those masquerading as financial specialists and are often invited to special "free lunch meetings", but later may be called upon by a sales representative wanting to do estate-planning or investment counseling, while trying to entice you into letting him handle your finances while promising a big return on your money.
Background Research And Background Checks When Picking A Financial Advisor
There are many legitimate and honest advisors with solid reputations which can be found, and are listed with agencies such as Garrett Planning Network, the Financial Planning Association and Certified Financial Planner Board of Standards. The American Institute of Certified Public Accountants has a list of CPA's who've qualified as specialists in this field.
When selecting and talking with a planner, ask about his qualifications and whether he understands all aspects of finances and not just a salesperson interested in selling you one particular service. Some planners only want to work with clients with a certain amount of income. Ask how long he's been in the financial planning business and whether he's worked with clients similar to your financial situation.
Be sure the advisor is certified by the Certified Financial Planner Board of Standards. That shows he's had the training, education, testing and necessary experience and agrees to abide by the Board's ethical standards.
What Is Your Fee? Can I See It In Writing?
Inquire about the fee charged. These can be fee-only, fee-based and commission paid. Planners who only charge fees do not take commissions on your investments, but charges either a fixed fee or an amount based on your assets that he is handling for you which could be 1 to 2%. Other planners may charge by the hour and that can range from $120 to $300 an hour.
Then there are fee-based planners who charge commission as well as a fee. Sometimes this can cause problems and should a planner not be completely honest about his charges, then dismiss him as a potential advisor.
When working with a planner, get everything in writing concerning his fees and services and have him go over your financial situation thoroughly. You need to have complete understanding. Ask how available he'll be should you need to talk with him.
If considering a particular financial advisor, investigate his background and reputation. Ask to see his ADV Form, Part II which is filed with the Securities Exchange Commission (SEC). This has information on his fees and services offered. Check with the state securities regulator to see if he is actually licensed and whether any complaints have been charged against him. He may have had disciplinary action. Do a check with finra.org.
Pre Qualify Your Financial Advisors - Shop Around
In considering advisors, choose at least three to discuss your financial situation with and follow all the above advise before deciding on anyone in particular to handle your retirement funds. Ask for references from several of his clients, and be certain to follow through on checking on him. Is he asking you personal questions about you or your family or is he only interested in your income and your net worth? If he only cares about your assets, this is one planner you need to avoid. You want to be able to completely trust the person you choose to handle your finances.
