What happens when someone with trust issues with advisors decides they need help with their investments?
In some cases, they write to me to assure me that they will be supported by a counselor. Here’s the latest: Now that we are both retired, managing our funds is more complex, and although I need support, I am very apprehensive about trusting our funds hard-saved retirement savings to someone who ultimately has to answer for their own company/managers, writes one reader. Can you give us some advice to reassure yourself about using financial advisors?
Here are some tips for finding good advice: Be prepared to find an effective and trustworthy advisor, but expect to be rewarded when you find someone who is a good fit. There are good advisors. I met them face to face. I’ve interviewed them and quoted them in columns because they are knowledgeable, ethical and friendly.
This reader has had several different advisors over the years, but never felt comfortable enough with any of them to trust them with all of her investments. Now, as a retiree, she wants to consolidate everything with one person who will protect the retirement money she and her partner have saved.
A plan for finding the right person: Make a list of potential advisors, then interview them to see if they’re the right fit. Find advisors by talking to friends and family to see if they have an advisor they recommend. Also try a directory of financial planners, advisors and coaches compiled by financial blogger John Robertson. Note: Some people on this list perform planning only, while others additionally provide portfolio management services.
Key questions to ask when interviewing potential advisors:
- Do you provide the specific services I need, such as a retirement savings-to-income strategy, tax and estate planning?
- What type of investment products do you use?
- Based on my preferred level of risk, how, in general terms, would you construct a portfolio for me?
- How would you protect my portfolio against a stock market correction, recession, inflation and other risks?
- How many clients do you have who look like me and what services do you offer them?
- Is my portfolio large enough to allow you to provide the services I want?
- What are your fees, in percentage and dollars, applied to my situation?
- What accreditation do you have as an advisor and how long have you been in the industry?
A few years ago, I developed a checklist to help evaluate whether people are getting value from their advisors. This can help inspire some questions to ask potential advisors.
There are many reasons why an advisor relationship doesn’t work for clients. One of them, let’s face it, is that they didn’t put enough effort into finding the right advisor. Don’t settle for anyone. Keep working.
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