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4 ways to hire & get the most from a financial professional

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As the United States approaches an unprecedented point in its history – what many are calling a retirement crisis – attention for retirement planning is at an all-time high.

The baby boomers are retiring, about 10,000 every day for the next several years, and their greatest fear is that they’ll outlive their retirement funding; of course, money is an issue for just about everyone else, too. Most people have a sense that they could be doing more with their money – more savings, better investments, etc. – much the same way that they know that they could be healthier. But on both accounts, taking action is a different story.

As with health, failure to take action on your finances will, over time, cost you, he says. While educating yourself on money matters has tremendous benefits, you’ll ultimately want a certified and experienced professional who manages money for a living. A strong client-advisor relationship is fundamental for success, says Friedman, who offers the following four tips for hiring an advisor you can trust and building a strong relationship:

What is your financial advisor reading?

Ask a would-be planner what he or she is reading.

Would you trust an advisor who doesn’t read? While experience is valuable, the most reliable form of knowledge usually comes from reading books and trade publications. The former deals in well-established information, while the latter explore new directions in the industry.

I would want to know that an advisor reads books on the best thinking on wealth management, economics, investment and retirement planning. Ideally, your advisor would also attend, participate and learn from others at seminars. In other words, good advisors are engaged in continual learning, not resting on what they learned 10 years ago.

Attentive financial advisor

Advisors should take copious notes and repeat back to you your concerns.

How do you know your advisor is listening to you, and is he or she getting crucial information, rather than simply sounding good with data points? Taking notes is a good sign. And, when she repeats back to you something you’ve just said, it indicates she is actively listening. You feel understood, and that’s when the “I get it” look passes between both of you. This moment is a link in the chain of trust and understanding that’s so important.

Really wealthy or fake wealthy?

Be forthright with your advisor.

This is essential. Some folks, for example, are “big-hat-and-skinny-cattle” people, which means they have a high standard of living – expensive vacations, BMWs, Rolexes, etc. – but little in the way of investment accounts, bonds, equities, commercial operations or real estate. This balance sheet does not spell success, despite the outward signs. Seasoned advisors need to see that balance sheet – they need to see what’s under that big hat. Whether there are fat or skinny cattle underneath a wealthy image, you and your advisor need to collaborate and agree on a common purpose. To achieve it, you need to be forthright from the outset.

Financial paperwork

Accountability flows both ways.

Do your homework. Advisors need personal documents that are crucial for a comprehensive review. Upon the agreement of a full financial plan, the advisor will want to review and analyze the following items:

  • a copy of the most recent tax return, including a W2 or 1099 info;
  • a copy of all bank, CD and money market account statements;
  • mutual fund, investment;
  • IRA accounts, 401(K) accounts and corporate benefit statements;
  • pension or annuity arrangements;
  • long-term-care and life insurance statements;
  • disability, liability umbrella, car- and home-insurance statements.

Without these, it’s nearly impossible to create a baseline of where you are now and to chart a course to where you want to be.


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