How to Find Trustworthy Help For Retirement Planning
Good help is difficult to come by these days. And when it comes to choosing an expert to help you make critical decisions for retirement, rollover your 401(k), or manage your investments, those willing to act in your best interest seem few and far between. There are just too many ways advisors can take advantage of their clients for financial gain.
Some people are just crooks. I’ve definitely seen enough of that! And others, though they aren’t bad people, are led astray by high commissions that line their pockets at the client’s expense.
That’s why you need some guidelines for finding a retirement planner who truly has your best interests in mind. They all say they do, but it takes some discernment to know which ones are the most trustworthy.
Without further ado, let’s put first things first…
Don’t Get Stuck With A Sales Person—Choose a Fiduciary!
This is by far the most important way to find good help.
Why?
Well… fiduciaries are ethically and legally required to act in your best interest. That doesn’t mean they always will. After all, legislation cannot make a dishonest person honest. However, you are significantly better off choosing a fiduciary who is held to a legal standard than someone who isn’t.
There are other governmental standards for advisors and financial planners who aren’t fiduciaries, but they are significantly more lax. And, unfortunately, some people take advantage of the extra slack on the leash.
In deciding whether someone is a fiduciary or not, don’t be misled by titles such as “financial advisor” or “wealth manager.” There’s nothing wrong with these titles, but anyone can slap them on a business card. So, when it comes down to assessing quality—the titles don’t mean much of anything. Just because someone says they are an advisor, doesn’t mean it’s in their heart to give you the best advice.
Instead of relying on titles, you should simply ask (point blank) if he or she is legally mandated to pursue your best interest. In other words, it is best to just ask, “Are you legally required to act as a fiduciary on my behalf?” It is even better if you can get the statement in writing.
Consider a Fee-Only Advisor
Fee-only advisors don’t receive commissions based on their sales. They are paid either a flat fee or a percentage of your assets that they manage, and that is it. A fee-based manager, on the other hand, is also paid commissions on the products they sell. Most of the time, this isn’t a big deal.
But what if one of these said products awards them a fat commission with every sale? And what if, despite the fact that the product isn’t at all right for you, they decide to sell it to you anyway? Do you see the conflict of interest and the potential devastation to your portfolio?
This is why it is best to choose a fee-only manager, or at least maintain a healthy level of skepticism with those who have significant conflicts of interest.
Beyond this, I would just ask that you remain sensitive to any red flags. Before you choose to work with anyone during this crucial time of financial transition, ask yourself the following questions:
- Do they take the time to educate you about your options?
- Can they back up their advice with sound, understandable reasoning?
- Do they begin and end with an analysis with your unique situation?
- Do they give you time to process without rushing your decisions?
Sound retirement planning advice is always educational. It is always transparent. It is always you-centered. It is never rushed.
This doesn’t necessarily mean they will lecture you about the ins and outs of the stock for hours on end, and it doesn’t mean they won’t ever miss a relevant aspect of your financial situation when giving you advice. I’m not trying to hold retirement planners to impossible standards.
But I’m also trying to keep you safe from those who only seek to take advantage of you. According to ARRP’s article, “Managing Your Money Manager,” “the government estimates that Individual Retirement Accounts alone lose $17 billion a year to ‘me first’ investment advice from salespeople who wring commissions and fees from their trusting clients.”
We don’t want your money to become a part of that statistic.
Want a Certified Financial Planner to analyze your investment portfolio at no cost to you? Call Seniormark at 937-492-8800 for a free no-obligation consultation.
About the Author
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