Selecting a financial advisor can be a complicated task with so many factors to take into consideration. Whether you’ve had a longstanding relationship with an advisor or you’re debating acquainting yourself with one for the first time, there can be a lot to consider to ensure you’re optimizing all that the right advisor has to offer.
As a financial advisor with Beaumont Financial Partners, I hear a number of questions about what people should consider when looking at their array of options. I’ve shared a few common questions below, in hopes they’ll help on your path to choosing the financial advisor who’ll best match your needs.
What are some things I should consider when selecting a financial advisor?
A variety of titles, such as financial analyst, financial planner and financial coach, are used synonymously these days to describe those who manage investments and provide financial guidance to clients. You’ll want to ensure that the person you trust your portfolio to has the right combination of skills, expertise and education necessary to get you in optimal financial shape in time to enjoy your future retirement.
One step you can take is to look for someone who is a Certified Financial Planner™ professional. This confirms they have the formal, educational knowledge necessary as a foundation to guide you on the right path. It means the advisor would have completed real-life training and adopted practical skills, preparing to make them capable of guiding your financial future. There are many qualified, knowledgeable advisors out there who are not CFP® professionals, so you should not disqualify someone if they aren’t one, but it’s a good place to start when you are looking for an advisor.
How can I trust that my financial advisor will have my best interest in mind?
Once you have a CFP® professional or other highly educated financial professional on your side, you should feel comfortable knowing they’ve completed formal training and are willing to uphold high ethical standards. As you continue to strategize and save toward your retirement goal, your advisor should uphold a fiduciary responsibility, meaning that they won’t try to sell you specific services or products. Instead, if they’re suggesting a resource or tool, you can trust it’s with your best interest in mind. It is no small feat to find someone who you trust to care for the money you’ve worked hard for throughout your entire career. However, knowing that a fiduciary relationship exists should provide you the confidence to delve into this unfamiliar territory. Whether an advisor works for a Registered Investment Advisor or a Broker Dealer, if they are a CFP® professional, they should be operating as a fiduciary, with your best interests in mind.
Should I be looking for a specialist?
It may be hard to remember what your greatest financial goal was 10 or 20 years ago when you first hired your current advisor. The dreams you once planned on have either already been attained or your desires have shifted through the years. Life and all its uncertainty can shift your path so greatly that you may need to overhaul your entire thought process. You may have begun working with a financial advisor years ago who you expected would grow to meet the demands of your next phase in life. As many clients find, choosing or switching to an advisor who focuses specifically on retirement needs offers unique benefits and insight that you may miss out on when sticking with a generalist.
The financial advisor you decide to go with should be a resource you trust with questions on a broad array of matters ranging from market trends to repositioning your investment contributions to match your ever-changing monetary demands. An expert will use their experience to address your concerns, questions and ultimately help you grow your own financial knowledge. Ultimately, your advisor needs to be a trustworthy person who you feel comfortable leveraging as a confidant and resource, so they can illuminate your future financial path.
Does it really matter what my advisor specializes in as long as they are certified?
A planner who focuses on retirement services, unlike investment management exclusively, will keep a holistic outlook of your retirement portfolio as opposed to the more siloed approach an investment manager may take. A CFP® professional who specializes in retirement planning should consider your portfolio in its entirety, taking into consideration which income generation means you’ll continue to have throughout retirement, as well as which expenses will carry on through your later years and potentially increase significantly, such as medical expenses. Keeping this in mind, an advisor with historical knowledge on retirement will have the ability to help you determine a strategy based on how to best plan for these factors as early on as possible.
Through navigating the nuances of retirement planning with many clients, advisors focused on retirement planning are able to use client experiences to help foreshadow the unknown, allowing you to plan for an array of possible retirement scenarios. Tackling the future with this method should help you feel well-prepared regardless of what unknowns arise. Someone who focuses on retirement planning may also be able to provide guidance on questions you weren’t even thinking of yet, just because they’ve run into the same concerns so many times before. An advisor focused only on the money management side of things may not have the same insight.
Although there is a lot to consider when planning for the future, it is true that there is no better time to take the first step than right now.
“Good fortune is what happens when opportunity meets with planning.” – Thomas Edison, Inventor
All views expressed in this article are my own and do not represent the opinions of my company.
To learn more about Adam Wojtkowski, view his Paladin Registry research report.