Your Financial Advisor is Retiring. Now What?

We often develop relationships with professionals who are like us.  They may live in our town, go to our church or country club, and have children of the same age.  It follows then that when the time comes that you are entering retirement, they may be too.  If your financial advisor is retiring you may be facing the awkward question of “who do I choose now?” While we cannot answer this question for you, we can shed some light on the dos and don’ts of how to select a new trusted advisor.

1. Do look for someone who is a fiduciary. A fiduciary, by law, must look out for your best interests.  Stockbrokers and insurance agents are held to a lesser, suitability standard.  Registered Investment Advisors are fiduciaries.

2. Do question the firm about how they get paid. If their compensation is tied to commissions on products sold, they will have an incentive to sell the products (like annuities) with the highest fees.  Consider a fee-only advisor to minimize this risk.

3. Do ask about what services are included. Ideally, your financial advisor will also provide you with planning and have CERTIFIED FINANCIAL PLANNERS™ on staff.  Your financial advisor should be able to assist you with all aspects of your finances including retirement income strategies, estate planning, inheritance issues, and more.

4. Do investigate their compliance record. You can see if there have been any complaints filed on the FINRA website.  Ethics are vitally important in this business of trust.

5. Do ask about the types of investments used and understand the risks involved. If you do not understand them, don’t buy them.  (Does anyone really understand annuities?)

6. Do look for a firm that is multigenerational. You may want someone at the helm with experience and wisdom, but you also want the next generation of advisors on staff who will be able to provide services for the long haul.

7. Do consider firms that employ both male and female advisors. Many women feel more comfortable working with female advisors; male-dominated firms can be intimidating.

8. Don’t select an advisor who is also the custodian (i.e., Bernie Madoff). Your financial advisor should hire an independent custodian (such as Charles Schwab) to hold your investments.  This is an especially important safeguard.

9. Don’t select an advisor purely based on short-term returns. You should always consider the risk that is taken to get the returns and evaluate your individual comfort level with regards to risk.

10. Do not choose an advisor who doesn’t ask you questions. The best advisor will want to learn about you and your goals before launching into a sales presentation about their firm.