How to Find a Financial Advisor for Your Retirement

Preparing for retirement requires careful planning and financial management. While some people may feel confident in managing their retirement finances on their own, others may benefit from the guidance of a financial advisor. A good financial advisor can help you navigate the complex world of retirement planning, investment management, and tax planning. They can also help you eliminate longevity and inflation risk. But with so many different types of financial advisors to choose from, finding the right professional can be overwhelming. 

Whether you are just starting to plan for retirement or you are already retired, a financial advisor can add immense value to your financial health. This article will discuss some practical tips on how to find a good financial advisor for retirement, questions you can ask the professional, and things you can look out for when deciding to hire an advisor.

 

Below are some steps you can take to make the process easier to find an advisor:

1. Determine what retirement service you need before you start looking for a financial advisor

Retirement needs can differ for different people. Therefore, it is necessary to take some time to think about your retirement goals and what you need from a financial advisor. For instance, are you looking for someone to help you manage your investments like stocks, mutual funds, etc., or do you need more comprehensive financial planning services? Some people only hire a financial advisor for specific financial needs, such as managing their investment portfolios. In contrast, others may require them to assist them with their overall financial well-being, including helping them decide their savings strategy, selecting the right investment options, overseeing tax liabilities, planning withdrawals in retirement, etc. Knowing what you need will help you narrow down your search. So start there. 

2. Get recommendations for financial advisors from people you know

Asking your friends, family members, and colleagues for recommendations can be an excellent place to start your search. If the people in your social or professional circle have worked with a financial advisor in the past or right now, you can ask them about their experience and whether they would recommend that person. You can ask about the professional's expertise, communication methods and ability to put the client at ease, fees, and more. This will give you an idea of what to expect and allow you to compare different professionals and choose the one that suits your needs the best. 

Keep in mind that there might be a drawback if you choose this path. Everyone's financial situation is different, so a financial advisor who works well for your friend or aunt may not be the best choice for your needs.

3. Use an online service to get matched with and compare financial advisors

Online advisor match services are typically free and allow you to be matched with suitable, vetted advisors based on your financial needs. WiserAdvisor is a free and trusted match service that has been connecting consumers to vetted and experienced financial advisors across the United States for over 20+ years. All the vetted financial advisors are experienced and highly skilled professionals that have been pre-screened for their years of experience, hold clear FINRA/SEC records and are not commission only as their mode of compensation for their financial services.

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4. Research the financial advisor's credentials to assess if they are a good fit for you

Once you have a shortlisted list of advisors, looking at the financial advisor's credentials is essential because it can help you understand their education level, training, and experience in finance. It can give you an idea of their expertise and specialization and the regulatory bodies that oversee their work. It can also help you identify any potential red flags, such as a lack of relevant experience or disciplinary actions taken by regulatory bodies. If you’re looking for a professional to help you with financial planning in retirement, you can look out for certifications like Retirement Income Certified Professional, Certified Retirement Financial Advisor (CRFA), Certified Retirement Counselor (CRC), Chartered Financial Consultant (ChFC), Retirement Management Advisor (RMA), etc. You can also look for credentials like Certified Financial Planner (CFP) or Chartered Financial Analyst (CFA). These designations and others indicate that the advisor has undergone training and has met specific standards.

You can also check if the financial advisor has a fiduciary duty. Fiduciaries have a legal obligation to act in their client's best interests. Hiring a fiduciary can be an advantage, but not all financial advisors are fiduciaries, making it essential for you to check. 

See: How To Use BrokerCheck To Evaluate A Financial Advisor’s Credentials

5. Check the professional's experience

When looking for a financial advisor, it is essential to find someone who has experience working with clients in situations similar to yours. This is because different financial situations require different strategies and approaches. For example, if you are close to retirement, you may have unique financial goals and challenges that require a specific set of skills and expertise.

By working with a financial advisor with experience in retirement planning, you can benefit from their knowledge and insights into issues such as tax planning, investment management, and estate planning. They may also have a deeper understanding of the various retirement accounts and options available to you, such as 401(k)s, Individual Retirement Accounts (IRAs), and Social Security benefits. Similarly, if you are self-employed or a business owner, you may want to work with a financial advisor who has experience working with entrepreneurs. They can help you navigate complex financial issues such as tax and succession planning. If you are a young professional just starting out in your career, consider finding a financial advisor who specializes in helping clients build wealth and achieve financial independence over the long term.

Ultimately, finding a financial advisor who has experience working with clients in similar situations can help ensure that you receive personalized and practical advice tailored to your unique retirement needs and goals.

6. Assess the financial advisor’s fees

Checking a financial advisor's fee model is crucial because it can significantly impact your investment returns and financial goals. The fee model determines how the financial advisor is compensated for their services. It is essential to understand how they are being paid so that you can make an informed decision about whether their services are worth the cost. There are different types of fee models. Some financial advisors charge a percentage or commission of Assets Under Management (AUM), while others charge a flat fee or hourly rate. Commission-based financial advisors earn a commission on their financial products, such as mutual funds or insurance policies. A fee-only financial advisor charges a set fee for their services rather than earning commissions on products they sell. A fee-based advisor charges a combination of fees and commissions. Some financial advisors may use a hybrid fee model suited to their preference. There is no good or bad model, just the one that suits your budget. But it is essential to ask for a clear breakdown of the professional's fees and any potential conflicts of interest before hiring their services. This way, you can decide whether their services are right for you. 

7. Check the advisor’s references to get an idea of their professional history

Checking a financial advisor's references is an essential step in selecting a financial advisor because it can help you understand their professional history and the quality of their work. References can provide valuable insight into a financial advisor's communication skills, work ethic, investment strategies, professional shortcomings, and overall performance. You can talk to their current and past clients to understand their experience working with the financial advisor. References can confirm that the financial advisor has the education, training, and expertise necessary to provide financial advice. They can also give you an idea of the financial advisor's investment performance and ability to achieve their clients' financial goals. Additionally, they can reveal any complaints or disciplinary actions taken against the financial advisor, which can be a warning sign that the professional may not be trustworthy or competent. 

It is essential to ask for multiple references and to speak with clients who have worked with the professional over a period of time to get a comprehensive understanding of their professional history and performance.

8. Interview multiple financial advisors before you make a decision on which one to hire

Once you have finalised a list of potential financial advisors, you can set up interviews to discuss your needs and their services. This will allow you to ask questions and understand whether the advisor is a good fit for you. You can also make a list of questions to ask the financial advisor. This can include questions related to retirement planning, like their recommended investment strategies for retirement, the savings rate they advise, and metrics they would use to track your retirement planning progress. In addition, you can inquire about how often they would rebalance your portfolio, tax-saving strategies you can use, estate and succession planning tactics they would suggest, and more. 

By interviewing potential advisors, you can also understand their communication skills and determine whether you feel comfortable working with them. Ideally, the financial advisor should be able to explain complex financial concepts in simple terms and communicate with you in a way that makes you feel comfortable. Additionally, you can ask about their code of ethics, how they handle conflicts of interest, and any potential red flags that may arise. This is particularly essential when hiring a financial advisor for seniors, as older people are more vulnerable to scams or being victims of financial fraud and negligence. 

Vital questions to ask a financial advisor about retirement

When preparing for retirement, it is essential to make sure that the financial advisor you hire serves your purpose and offers you the right advice and services for your distinct needs. Here are some critical questions to ask a financial advisor about retirement that can help you assess whether or not they are the right fit for you. Asking these questions will also help you understand how to plan for your retirement:

1. At what point should I start thinking about planning for retirement, and what are the initial steps I should take?
2. How can I identify my retirement objectives, and what strategies can I implement to attain them?
3. How much should I save for retirement to ensure I do not outlive my savings or lose them to inflation? 
4. What are the most effective investment approaches to achieve my retirement targets?
5. What are the advantages of various retirement savings options, such as 401(k)s, IRAs, annuity plans, etc., and which of these should I prioritize contributing to?
6. How much Social Security benefits would I receive, and how do I maximize my benefits?
7. What are the tax implications of my retirement investments, and how should I plan my retirement plan distributions to minimize my tax liabilities in retirement?
8. How can I save enough for unexpected expenses in retirement, such as health emergencies, debt situations, home repairs, etc., to ensure I do not run out of money sooner?
9. How can I accommodate my lowering risk appetite in my investment portfolio as I age?
10. How can I plan my estate to ensure my beneficiaries are adequately cared for in my absence?
11. How often should I review and modify my retirement plan, and what aspects should I consider when doing so?

There are several other questions you can ask the financial advisor based on your unique needs and concerns. You can take some time to jot them down and clarify your doubts from the professional to ensure you are on the right path to financial freedom in retirement. 

For additional questions to ask your advisor during your meeting, see our article Questions to Ask Your Financial Advisor.

To conclude

Remember, choosing a financial advisor is an important decision, and it is worth taking the time to find the right one for your needs. The tips mentioned above can help you find suitable professionals who can significantly impact your financial well-being. Remember to do your due diligence and carefully evaluate the professional’s credentials before entrusting them with your money. It is also important to use reliable search tools.

If you’re ready to find a vetted financial advisor for retirement, use our trusted free advisor match service. All you have to do is answer a few simple questions based on your financial needs, and the match tool will help connect you with 1-3 advisors best suited to meet your financial requirements.