It is wise for retirees to ask a financial advisor when they try to make retirement plans. A financial advisor is able to offer guidance and recommendations so as to save them from potential difficulties. To make the best use of a financial advisor, retirees need to know how to ask the right questions. The following five questions can give them a hint about what they should ask.

  • What services do you provide to your clients?

A responsible financial advisor should help their clients figure out how much they need before they retire, develop an investment strategy regarding their risk tolerance and term, manage their expenses, and maximize their tax benefits. If retirees find out their financial advisor cannot offer the services above, it is time for them to keep searching.

  • What are your qualifications?

Normally, a financial advisor needs to have high-level financial education and retirement planning experience. They should acquire the following qualifications: Certified Financial Planner (CFP), Chartered Financial Consultant (ChFC), Chartered Life Underwriter (CLU), and Retirement Income Certified Professional (RICP). Retirees also need to verify the answer of their financial advisor by checking Designation Check in order to find out whether what they said is true or not.

  • Are you a fiduciary?

Some financial advisors gain profits from commission, which will push them to make some risky investments against the wills of retirees. However, if a financial advisor is a fiduciary, they ought to work for the best interests of the retirees.

  • How should I pay you?

Retirees need to know how they pay their financial advisor in advance. Some of them are paid per hour; some of them are paid per year, and some of them are paid according to retirees’ assets and transaction. Retirees should always be alert to the one who get paid on commission since they are very likely to choose risky investment with higher fees.

  • Is my money held by your company?

A financial advisor should never hold their clients’ money. Instead, the money is controlled by a reputable custodian which is a third party owned by their company. Famous custodians include Fidelity Institutional, LPL Financial, and Charles Schwab, and they will control retirees’ money, make transactions, make distributions, and produce monthly statements.

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