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A qualified and experienced senior financial advisor can make your life easier by taking the confusion out of money management. There are plenty of upstanding financial professionals, but there are also scam artists who target seniors precisely because they\u2019ve spent a lifetime building a nest egg. The AARP says people over age 60 make up a disproportionate number of investment scam victims. But with the right approach you can avoid scammers and find pros to help make your retirement more secure.<\/p>\n
A good rule of thumb is that you should be the one to make the first contact with a retirement planner, not the other way around. Be suspicious of calls offering senior financial planning services, ads for free lunch deals, and \u201curgent\u201d mail promising great returns on \u201csecret\u201d investments. Reputable financial planners don\u2019t need high-pressure tactics to bring in business.<\/p>\n
Ask people you trust who they trust with their money. Keep a list of their recommendations and use it as your starting point for the research that follows.<\/p>\n
There are dozens of certifications available to financial advisors. Some require years of education and rigorous testing. Others are not so challenging. Visit the planners\u2019 web sites and note which credentials they list. Then look up those credentials to see how valuable they really are. <\/p>\n
Certified Financial Planners (CFPs) are the advisors most often recommended by finance publications such as The Wall Street Journal and Kiplinger\u2019s, based on the amount of training and testing CFPs must undergo.<\/p>\n
Narrow your list down to the planners with accredited credentials and check those people out in more detail.<\/p>\n
The Financial Industry Regulatory Authority runs a free service on its website called BrokerCheck. When you enter a broker\u2019s name and location, BrokerCheck shows you his or her work history, qualifications, and any customer disputes on record. If the advisors you\u2019re considering also offer insurance products, check with your state\u2019s insurance board to make sure they have current licenses and a clean record.<\/p>\n
Now you should have a list of qualified planners with clear backgrounds and current, reputable certification. It\u2019s time to request a phone chat or in-person meeting with each of them.<\/p>\n
The first thing to know is whether a particular planner can work with you at all. Some firms and advisors have a minimum asset requirement \u2014 as much as $500,000 \u2014 in order to take on a client. If your nest egg is smaller, ask up front if the retirement planner can work with you. <\/p>\n
Find out what their specialties are. You want someone who understands the needs and challenges of seniors and retirees. If you\u2019d prefer to have one point of contact for as much of your personal finance as possible, you may want a planner who also offers insurance.<\/p>\n
Look for compensation plans that reduce a possible conflict of interest. In general, fee-based compensation is what financial pros recommend. Fee-based means that the advisor is paid a percentage (usually 1%) of the investments he or she manages for you each year. If your investments gain value, the advisor makes more money. If their value drops, so does the advisor\u2019s compensation. <\/p>\n
It\u2019s also important to know if the planner is a fiduciary. A fiduciary is required to put clients\u2019 best interests first always, while other advisors only have to offer options that are suitable in general.<\/p>\n
Senior financial planners who are paid on commission are more likely to have a conflict of interest, especially if their only compensation comes from commissions. Insurance policies are usually sold on commission, but ideally investment management like mutual funds and stocks would be paid for by fees.<\/p>\n
Hourly pay is another way that some financial advisors get paid, and it may be your only option if your nest egg is very small. <\/p>\n
A good retirement planner will tailor a strategy to your needs, assets, and risk tolerance. Especially if your career years are behind you, it\u2019s critical that your advisor not take unnecessary risks with your investments.<\/p>\n
A face-to-face meeting every year is the starting point. If you have more questions or are undergoing a major financial transition like selling a business or home then you will need to be in touch more often. The best planners are accessible and ready to answer questions when you need them. <\/p>\n