The Questions You MUST Ask to Select the Right Financial Advisor for Your Retirement

questions

Whether you’re 30 or 60 years old, involving a financial advisor in your retirement planning is a smart move. But not all financial advisors are created equal.

Some advisors are more interested in making money or meeting employer metrics. It’s important you know how to steer clear of these folks and find an advisor who truly has your best interests in mind.

Here are some important questions to ask when selecting the best financial advisor for you and your retirement blueprint.

How Committed Are They to Your Wellbeing?

Just how devious and self-serving a financial advisor can be was brought to the public eye when Bernie Madoff’s crimes against his clients were exposed. Of course, Madoff’s case is extreme, but nonetheless, people seeking a financial advisor can’t be too careful. You want a financial advisor who is trustworthy, reliable, and dedicated to helping you achieve your retirement goals.

A lack of checks and balances, as well as client ignorance about investments, contributed to Bernie Madoff’s ability to rip off his clients. For example, you should never write a check for an investment directly to your advisor. Instead, it should be made out to a third-party independent custodian, such as Charles Schwab, Fidelity, TD Ameritrade, or Pershing.

Your advisor should use a checklist when advising you and your family to methodically ensure nothing is missed. There’s a reason pilots and engineers routinely use checklists in their work: because they are helpful in guarding against errors and omissions. They should be sure they aren’t missing anything in your original intake conversation or along the way as you continue planning.

A question you want to ask early in the process is: are they a fiduciary or are they acting under the suitability standard? A fiduciary is legally obliged to do what is in your best interest every time, no matter the circumstances.

Someone who follows the suitability standard, however, only needs to make sure an investment is “suitable” at the time of sale. And the legal definition of “suitable” can be broad. Sometimes what is deemed technically suitable for the client entails kickbacks for the advisor, meaning they have a vested interest in selling you something that may not be in your best interest.

So, who would you rather entrust with your financial future? An advisor who’s just doing a “suitable” job, or someone you can trust to put you, your goals, and your well-being first?

What Kind of Education Do They Provide Clients?

Whether they take the time to personally hold your hand through the retirement process or they offer formal classes, your financial advisor should be educating you in retirement basics, like:

  • Social Security
  • Taxes
  • Medicare coverage
  • Financial planning
  • Spending
  • Investing

The more involved you are in your financial planning, the more comfortable you’re going to feel, and the more positive your outcome is likely to be. That’s one of the reasons we encourage married clients to attend our meetings and educational events together. And it’s the big reason we place such an emphasis on regular seminars, webinars, blog posts, and podcasts that keep our clients informed about topics that could impact their retirement planning.

Do They Engage in Continuing Education?

Your advisor should also participate in continuing education themselves, and not just the minimum required. They should attend conferences, think tank sessions, or meetings, like the Barron’s Top Advisors Summit that Keen Wealth travels to every year. They should have professional designations that require ongoing training and education and they should be fulfilling those requirements.

What Questions Do They Ask You?

The best relationships with financial advisors should always begin with a lot of questions for you. After all, how can they advise you if they don’t know where you are in the retirement planning process, what your goals are, and what you have in the way of assets and liabilities? Common topics for discussion include:

  • Retirement timetable
  • Financial upbringing
  • Current family dynamic
  • Legacy goals
  • Healthcare
  • Insurance
  • Tax history

Notice that, in general, these topics have more to do with what you want to get out of life than they do with your money. If an advisor goes straight to your assets and wants to know “your accounts and the amounts” before conducting a proper evaluation of your unique situation, run! This is not someone who has your best interests at heart.

What Is the Total Cost to the Client?

When you’re on the hunt for a retirement advisor, you will want to know what it’s going to cost you.

Never ask, “What are your fees?” because that isn’t usually inclusive of all the costs to you. Instead, ask, “What will my total costs be to work with you?” This should reveal any hidden fees or expenses and how much products like no-load mutual funds really cost.

If you’re interested in a more comprehensive list of questions you should ask a prospective advisor, email me and I’ll be happy to send you a copy. Any advisor who won’t give you clear answers to the questions on my list should not be managing your money.

The right financial advisor can assist in navigating you through any confusion your retirement may bring.  Taking the time to select the advisor that’s best for you will pay off in the long haul, so follow these tips to ensure you get the professional who is knowledgeable, affordable, thorough, and most of all, committed to your retirement goals.

For more advice on selecting the best financial advisor for your retirement plan, you can find the book Keen on Retirement: Engineering the Second Half of Your Life on Amazon.

Bill Keen: Any advisor who won’t give you clear answers to the questions on my list should not be managing your money.

About Bill

Bill Keen is a CHARTERED RETIREMENT PLANNING COUNSELOR℠ and independent financial advisor with more than 25 years of industry experience. As the founder and CEO of Keen Wealth Advisors, a registered investment advisory firm, he specializes in providing personalized retirement planning designed to help people thrive before and during their retirement years. With a passion for educating others, Bill regularly blogs about retirement planning, hosts the podcast Keen on Retirement, and has contributed to U.S. News and World Report, Reuters, Wall Street Journal’s Market Watch, Yahoo Finance, and other publications. Based in Overland Park, Kansas, Bill and his team work with clients throughout the greater Kansas City area and across the nation. To learn more, connect with him on LinkedIn or visit www.keenwealthadvisors.com.

Keen Wealth Advisors is a Registered Investment Adviser. Nothing within this commentary constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Keen Wealth Advisors manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed here. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.  

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