The market for retirement financial advice is in flux and ever more uncertain. The recent long-term shift away from conventionally defined benefit pension plans to more flexible, Roth-like individual accounts requires us to be smarter today than ever before. Not only do we need to think about our immediate future but what will happen after we are no longer working.
Ask Some Very Specific Questions
When choosing a financial advisor, you need to ask some very specific questions. One of the first is how much experience does the advisor have with retirement savings and pension planning? You need someone who understands that it’s not just a question of numbers. Good financial guidance counselors should understand the risks and rewards involved in individual retirement account plans. They should also be able to help you find the best option for your current situation.
Offers Different Rates
Next, you should ask how much the advisor will charge per month for his or her retirement advice. Different financial advisers offer different rates. Some charge less than a percent. Others may charge as much as five percent or more. Before deciding upon an advisor, make sure you understand the fees you will be required to pay each month, and then compare those fees with other similar advisors.
You should also consider how much the planner will focus on financial products and services. Does he or she provide a full range of products and services, such as investment advice, Roth conversion services, managed accounts, and more? If so, ask if the advisor uses the same products and services offered by other competitors. Is he or she selective of those products and services? Do they simply go with the company with the biggest name in the market? In this competitive industry, customers will want a financial advisor who is focused on providing a full range of products and services.
Education and Expertise
You should also focus on the advisor’s level of education and expertise. Although you may find some very competent and experienced advisors in the middle market, you will probably find that many of them are still relatively new to the profession. Many middle-market advisors have either no experience at all, or have the little educational background. Unless you require specialized advice regarding a small number of specific investment options, you should avoid the middle market and stick with full-service financial advisors. These advisors will usually charge more because they will use more expertise and training to help you create and execute your financial investment strategy.
There are many different ways to select the right advisor for your needs. In general, start by asking friends and family for their opinion about different financial advisors. Seek out the advice of well-established publications and networks, and evaluate what different experts have to say about different advisors. Of course, you should be wary of middle-market advisors who boast of decades of experience and a “generation” of stellar performance, especially since most of these advisors are relatively recent to the field.
Once you have narrowed your list of top advisors down to a few names, contact each individual to discuss the types of advice they can provide and the different ways in which they can serve you. Before contacting any planners, you should already know whether you would be receiving a fee for your services. If you would ask the planner to provide a cost analysis for you to look over. A good planner will be willing to discuss fees and other details in great detail. You should also ask about their use of a behavioral finance model.
Behavioral Finance Models
Behavioral finance models are a relatively new way of helping people better understand how their investments may be affecting their long-term success. This type of model is widely used by retirement planners across the industry and has been found to greatly improve the quality and accuracy of the advice that people receive from financial planners. Although this particular type of model is not specifically found in every planner’s toolbox, it is surprisingly easy to find one that suits your tastes and needs and that you feel comfortable working with. When you’re ready to begin seeking the best advice for your financial future, you can contact a few different firms for further information on the market for retirement financial advice.