7 Secrets Comfortable Retirees Know About Hiring a Financial Advisor

Please Read or Unsubscribe Sponsored content keeps our newsletter free. We do not endorse all advertisers. SPONSORED 7 Secrets Smart Professionals Use To Choose Financial Advisors Choosing a financial advisor is a major life decision that can determine your financial trajectory for years to come. A 2020 Northwestern Mutual study found that 71% of U.S. adults admit their financial planning needs improvement. However, only 29% of Americans work with a financial advisor.1 The value of working with a financial advisor varies by person and advisors are legally prohibited from promising returns, but research suggests people who work with a financial advisor feel more at ease about their finances and could end up with about 15% more money to spend in retirement.2 Consider this example: A recent Vanguard study found that, on average, a hypothetical $500K investment would grow to over $3.4 million under the care of an advisor over 25 years, whereas the expected value from self-management would be $1.69 million, or 50% less. In other words, an advisor-managed portfolio would average 8% annualized growth over a 25-year period, compared to 5% from a self-managed portfolio.3 SmartAsset's no-cost tool simplifies the time-consuming process of finding a financial advisor. A short questionnaire helps match you with up to three fiduciary financial advisors that serve your area, legally bound to work in your best interest. The whole process takes just a few minutes, and in many cases you can be connected instantly with an advisor for a free retirement consultation. Advisors are rigorously screened through our proprietary due diligence process. Being aware of these seven common blunders when choosing an advisor can help you find peace of mind, and potentially avoid years of stress. 1. Always Hire an Advisor Who Is a Fiduciary By definition, a fiduciary is an individual who is ethically bound to act in another person's best interest. Fiduciary financial advisors must avoid conflicts of interest and disclose any potential conflicts of interest to clients.. All of the financial advisors on SmartAsset's matching platform are registered fiduciaries. If your advisor is not a fiduciary and constantly pushes investment products on you, use this no-cost tool to find an advisor who has your best interest in mind. 2. Don't Hire the First Advisor You Meet While it's tempting to hire the advisor closest to home or the first advisor in the yellow pages, this decision requires more time. Take the time to interview at least a few advisors before picking the best match for you. 3. Don't Choose an Advisor with the Wrong Specialty Some financial advisors specialize in retirement planning , while others are best for business owners or those with a high net worth. Some might be best for young professionals starting a family. Be sure to understand an advisor's strengths and weaknesses - before signing the dotted line. 4. Don't Pick an Advisor With an Incompatible Strategy Each advisor has a unique strategy. Some advisors may suggest aggressive investments, while others are more conservative. If you prefer to go all in on stocks, an advisor that prefers bonds and index funds is not a great match for your style. 5. Always Ask About Credentials To give investment advice, financial advisors are required to pass a test. Ask your advisor about their licenses, tests, and credentials. Financial advisors tests include the Series 7, and Series 66 or Series 65. Some advisors go a step further and become a Certified Financial Planner, or CFP. 6. Understand How They are Paid Some advisors are "fee only" and charge you a flat rate no matter what. Others charge a percentage of your assets under management. Some advisors are paid commissions by mutual funds, a serious conflict of interest. If the advisor earns more by ignoring your best interests, do not hire them. 7. Hire a Vetted Advisor Chances are, there are several highly qualified financial advisors in your town. However, it can seem daunting to choose one. Our no-cost tool helps make it easy to find qualified financial advisors who serve your area . Now you can get matched with up to three fiduciary investment advisors that are vetted and subject to our due diligence criteria. The entire matching process takes just a few minutes.   Get Your Free Financial Advisor Matches   Sources: 1. "Planning and Progress", Northwestern Mutual (April 2020) 2. Journal of Retirement Study Winter (2020). The projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of your future results. Please follow the link to see the methodologies employed in the Journal of Retirement study. 3. Vanguard (July 2022), Putting a Value on Your Value. The projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of your future results. Please follow the link to see the methodologies employed in the Vanguard whitepaper.     DISCLAIMER Use of this Publisher's email, website and content, is subject to the Privacy Policy and Terms of Use published on Publisher's Website. Content marked as "sponsored" may be third party advertisements and are not endorsed or warranted by our staff or company. The content in our emails is for informational or entertainment use, and is not a substitute for professional advice. Always check with a qualified professional for treatment advice and/or diagnosis. Be sure to do your own careful research before taking action based on anything you find in this content. © ConservativeCardinal. All Rights Reserved.