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How to Choose a Retirement Financial Advisor


If you’re under age 55 and have six figures or more stashed away in retirement accounts, you’re well ahead of the curve: As of June 2015, the average amount of retirement savings for those in the 55-64 age bracket was just $104,000. But for those who hope to achieve a retirement income of $1,000 or more a month, even six figures in savings isn’t likely to be enough. In many cases, a retirement financial advisor can help you focus your goals and choose the investments that will help you achieve them. Read on to learn more about choosing a financial advisor for your retirement funds and the questions you’ll want to ask before you get started.


Check Your Financial Advisor’s Credentials

A financial advisor or financial planner performs a different role from a stockbroker, CPA, or tax preparer. Financial planners are fiduciaries, which means they’re legally obligated to act in your best interests at all times. This is as opposed to brokers or salespeople, who may recommend that you purchase funds or investments that provide them with a commission.

When seeking out a retirement financial advisor, you may want to focus your search on individuals who maintain a CFP (certified financial planner) certification. This certification indicates that the advisor has passed the Certified Financial Planner Board of Standards test, a comprehensive evaluation similar to a bar exam for attorneys or a CPA exam for accountants.

And like attorneys, accountants, and other professionals, CFPs must attend a certain number of continuing-education courses each year to ensure they stay up-to-date on developments in financial laws and personal finance practices.

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What to Expect Regarding Cost and Fees

There are several common fee structures among financial advisors.

Flat rate

Some financial planners charge a flat rate to provide you with investment advice and invest your money. Depending upon the scope of services outlined in the flat rate agreement, you may pay a reduced rate whenever you’d like to seek financial or investment advice on a different topic.

Annual or hourly fee

Other financial advisors charge a flat annual fee that covers a certain number of appointments or meetings, or they charge by the hour for time spent meeting with you or managing your money.

Percentage of assets

While flat-rate arrangements tend to be more popular among advisors these days, some planners still base their fees on a certain percentage of your invested assets, usually 1 to 2% annually.

Questions to Ask When Choosing a Retirement Financial Advisor

Before selecting a planner, there are a few key questions you’ll want to ask:

Do you manage other clients with asset levels and goals like mine?

While a good CFP is able to advise clients on a range of income and asset levels, knowing that your planner deals with other clients in your situation can provide an extra level of confidence.

What’s your payment structure?

There’s no one right answer to this question, but any reluctance to provide a clear response could mean you’ll end up paying more than you expect.

Benefits of Managing Your Own Money

While a financial advisor can be helpful, it’s often said that “no one cares more about your money than you do.” Some specific benefits can come from learning to manage your own money. These include:

Greater control over your investments

Turning over control of your money to someone else, even a fiduciary, can be tough. By learning more about identifying value stocks and investing in them for the long term, you’ll be well-equipped to see (and choose) the investments that will provide you with the best return.

Minimal cost

If you’re a long-term investor at a low-cost brokerage firm, you’ll pay next to nothing to purchase and maintain investments. This can save you thousands of dollars per year in fees.

Whichever direction you decide to go, be sure to set retirement savings goals that will keep you on track to retiring on schedule and in comfort.

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    About :

    Phil Town is the founder of Rule One Investing, a hedge fund manager, a two-time New York Times best-selling author, an ex-Grand Canyon river guide, and a former lieutenant in the U.S. Army Special Forces. He and his wife, Melissa, share a passion for horses, polo and eventing. Phil’s goal is to help you learn how to invest and achieve financial independence.

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