So, you're looking toward retirement and want to find the right person to manage your investments. Whether you’re 20 or 60 years old, it’s important to find someone that will take good care of you and your money.
Unfortunately, there's a lot of advisors out there who may not have your best intentions at heart. So how do you find the right person?
First of all, I recommend interviewing at least three people. Don't just stick with your friend or family member, but talk to three different people and interview them, just like you would interview someone for a job. Since you’ll be paying them money to manage your finances, it's important to get to know them and make sure that their philosophies line up with yours.
What should ask them in these interviews? Here are 4 questions to ask a financial advisor before hiring them.
Question #1: How Are You Paid?
Like I said, you're going to be paying them, so the first question to ask is, “How are you paid?” Most advisors are paid one of two ways: fee based or commission based (or a combination of the two). Typically, most people look for someone who's fee based, simply because you're paying them a flat rate for their services. Usually the standard is 1% of the assets they are managing.
There's nothing wrong with a commission based advisor, you just want to be cautious that they have your best intention at heart. Since they make a commission, some may steer you toward investments that benefit them more than they benefit you.
Question #2: What Is Your Investment Philosophy?
Next you want to ask what their philosophy is when it comes to investing. You want to know that they are on your side and line up with your level of risk. You also want to know that when the market's crashing or it's down, that they're going to be there to talk you out of pulling your money out.
They need to have a good grasp of the rise and fall of the stock market., When it's your retirement money sitting there in a recession, your gut's going to be saying, "I need to pull my money out before it hits rock bottom!" You need a professional on your side to stop you and say, "Wait. Trust me. It's always trended up. You're going to be okay. Let's just hold it right there, don't do anything rash."
Question #3: What Will Our Relationship Look Like?
What is it going to look like working together? How often are we going to meet? What are the updates going to be? Do I have email access to you? Are we going to have regular phone calls? If I want to sit down and meet with you, what does that look like? Are there additional charges to do that? What other services do you provide that are included in managing my portfolio? Is it just the portfolio? Is there other support that I get?
Ask all of these things as you interview advisors. You want to know what that relationship is going to look like, and find the person who most meets your needs. If you're somebody who wants a lot of updates, you want someone who's going to keep you updated regularly. If you are somebody who doesn't even want to think about it, then someone calling you once a month is not going to be the best fit for you.
Question #4: What Do You Love About Your Job?
This is a great opportunity for you to really see their personality, their character, and what really drove them to this profession.
Find someone that genuinely loves helping people. The thing is, if an advisor is good and takes care of their clients, then they don’t have to worry about money. So find someone that cares about you. Someone that is willing to teach you about how they manage their money, and offers full transparency.
If you'd like an unbiased look at your retirement plan, click here to schedule a free session with me. We'll put together a solid plan without the pressure of a sales pitch.