Updated: Dec 20, 2021
Confidence is king. Whether it is confidence in sinking that next putt on the golf course, or walking into a room of strangers and spotting a friend, or even knowing you look good in a new outfit, when we have confidence we feel good. How about having confidence in your impending retirement? Or confidence in knowing what you would do if your beloved spouse was incapacitated or died suddenly? Answer these questions to see if you have the right financial professional by your side to help you through life’s uncertainties:
Do they educate you? They should be providing you with the pro’s and con’s of their recommendations. No investment strategy is bullet proof, and even if you aren’t interested in understanding the difference between “beta” and a “Sharpe ratio” when choosing a mutual fund, you should still have some broad understanding of their recommendations and how it fits for you.
Do you understand how they are being paid? As an educated consumer, you need to know whether your advisor is being paid on a flat-fee basis, or by commission and mutual fund marketing fees, or some combination. It may influence the type of financial investments recommended to you.
Are they part of an integrated team? No one likes to put all of their eggs in one basket. Be sure your advisor is part of an organized team of professionals that communicate with each other. Your team should include a tax CPA, a licensed wealth manager and CFP®, an estate attorney and a qualified insurance agent.
Are they educated and credentialed? Ask how your advisor is educated and be aware of professionals who take a one-time exam to earn a designation with no further education requirements. Professional designations such as CFP® and CPA have annual continuing education requirements, ensuring that they are current in the ever-changing world of finance and taxation.
Have your needs changed over time? Even if you’ve worked with your advisor for years, they may not be experienced in creating tax-efficient retirement income plans or life transition plans. Ask them if they know what sequence-of-returns risk is, and if they give you a blank look it might be time for a second opinion.
Call us today for a complimentary meeting and bring these questions with you. I believe you’ll like our answers.