You’ve saved, contributed to your employment savings plan, and even invested for your retirement, and now you’ve decided you need help.
Or, more help. Or better help.
Where to start ? There are countless financial professionals out there, referring to themselves by different titles, listing various licenses and affiliations, and offering awe-inspiring claims for peace of mind in your golden years. How can you narrow it down to an industry leader that’s really right for you?
Ultimately, it will depend on who you think you can trust, who welcomes your questions and concerns, and who is by your side for the long haul. You can get a feel for if someone is a good fit from an interview – but you need to prepare for it with the right questions and how the answers will help you achieve your goals.
Here are a few questions to get you started.
1. Do you work for a particular company and which investments do you recommend the most?
The answer will tell you how the person is functioning. Are you dealing with a broker who works to meet corporate quotas or do you deal with an advisor who wants to work for you and achieve your goals?
Think of it like a visit to a new doctor. You would not want to be prescribed something until you have undergone a thorough examination. If you were in need of treatment, you would want to choose from the best options, not just the ones the medical group has made an agreement with.
You want to hear advisors say they are customer centric, not product centric. And counselors shouldn’t be able to give you advice until you’ve completed a full analysis of your situation.
2. What is your investment approach?
One term you may hear is âbuy and hold,â which means investing for the long term. It’s a philosophy that has been around for some time and could make you feel safe and comfortable. The problem is when it comes to ‘buy and hope’. This may not be the best prescription for investors today. What you are trying to decipher is if the counselor is just not up to date with the new strategies, or perhaps, going back to the physician metaphor, the counselor is more interested in treating large numbers of patients. rather than taking the time to figure out what’s best for everyone.
On the flip side, if the approach is to buy lots of stocks and trade them, you’re probably dealing more with a stock broker mentality, where commissions are charged on every move. Your age should also be a factor here. If you are about to retire, the risk involved may be too high compared to the risk tolerance you had at the start of your career.
What we recommend is a matching approach – not too cold, not too hot, but fair. You want an advisor who doesn’t have just one strategy, but rather a personalized plan to meet your goals and needs.
3. What are your costs?
Most consumers don’t know much about the different ways financial professionals are paid: fees only, fees, or commissions.
Again, which structure is best for you will depend on your financial situation. If you are a handyman, a paid advisor or stockbroker may well meet your needs. But for most people, a paid counselor is the best option. This type of advisor will take care of your money full time. Why? The advisor has the skin in the game. Your loss is the advisor’s loss and your gain is their gain.
What you really want to hear is that your advisor can work under any structure you need at the time. If it was a doctor, your advisor would be your primary care physician and specialist, with the knowledge and experience to provide you with the best scenario.
4. What is the minimum amount of money you will be working with?
Many finance professionals start out as brokers selling products to anyone who needs them. But then, as they gain more experience, many find that they don’t want to get sucked into a lot of small accounts, so they’re going to set a minimum on how much money they want. they will manage. This can be good or bad depending on where you are at with your wallet. But if you are looking for an advisor who has gone for quality over quantity, a minimum is not a bad thing. It means that you get someone who is focused on your needs.
5. How are you different from other advisors?
This question can really embarrass people. If potential advisors start a business line on âour business,â they can tell you they’re following head office goals, not yours.
The advisors you are considering should be able to tell you what makes them special, what sets them apart. For example, do they focus on tax planning, preservation or estate planning? You want to feel like they care about you. You want to see the passion, that they love what they do and that it’s more than a job for them.
Prospective advisors should have more than 10 years of experience to have weathered recent market trends and fluctuations and to have survived. In addition, they should be able to talk about their ability to team up with other professionals – tax and estate lawyers, CPAs, etc. – to be able to offer comprehensive asset management.
You should interview advisers, but they should also interview you. If they don’t think they can meet your needs, you want them to be willing to say so and refer you to a counselor who might be a better fit.
Kim Franke-Folstad contributed to this article.
President, Ayers Financial Services
Patrick W. Ayers is the founder of Ayers Financial Services. A graduate of Virginia Tech, where he obtained a degree in finance, he retains the title of Registered Financial Advisor and is a member of the Association of Registered Financial Consultants and the International Association of Financial Planning. Ayers is a frequent guest speaker on radio and television, and he frequently hosts information seminars for businesses, universities, charities and individuals.Securities and advisory services are offered by Madison Avenue Securities, LLC (MAS), a FINRA / SIPC member and a registered investment advisor. MAS and Ayers Financial Services are not affiliated entities.The opinions of Patrick Ayers and Ayers Financial Services are theirs.