Retirement Financial Advisor Explains Chart

Best Financial Advisors for Retirement

Updated on Nov 02 2018


Choosing the best financial advisor to help you with your retirement needs can be tricky. There are many different types of financial professionals, but finding someone you trust who is an expert on retirement planning is key.

More than 400,000 people in the U.S. call themselves financial advisors today, according to data from AARP. These financial professionals have many title designations to sell financial products and give advice. Some of these credentials don’t require much training or expertise, or even a code of ethics.

When it comes to building and protecting your retirement savings you want to make sure you enlist a qualified professional who is right for the task. Here are a few important things to consider when you’re searching for a financial advisor to help with your retirement planning needs:

1. Start with a Fiduciary

A fiduciary is an excellent choice for a retirement financial advisor because these financial experts are held to the highest standards. Many financial advisors are not fiduciaries, so it’s a good idea to choose a fiduciary as they are bound ethically to act in their clients’ best interest. Money managers, bankers, accountants, executors, board members and corporate officers can all be considered fiduciaries as their responsibilities or duties are both ethical and legal. There are many regulatory requirements and criteria to become a fiduciary, so do your research to find an advisor who holds this prestigious designation.

2. Check the Advisors’ Credentials

Credentials can be precarious. Some organizations offer easy-to-get credentials for a fee and sometimes a small course so that salespeople can pay the fee to get the “credential” and appear to be an expert. You want to find someone with reputable credentials to manage your finances, not someone who has a title with little to no experience or proper financial designation.

To make sure a prospective financial advisor has current credentials and hasn’t been disciplined by any regulatory authority you can visit smartcheck.cftc.gov for easy checking access. Please note that while The Commodity Futures Trading Commission has bundled all the major regulators online, brokers can often get negative marks expunged from their records, so just checking this site may not be enough. For advisors who sell insurance products such as annuities, check them out through your state’s division of insurance.

Also, if you’re near retirement, you may want to consider finding an advisor with specialized training in retirement planning, like a Retirement Management Advisor (RMA) or a Retirement Income Certified Professional (RICP). Keep in mind that credentials are obtained by passing an examination that measures proficiency on the subject matter. To maintain the designation, an advisor must adhere to an ethics policy and meet continuing education requirements.

3. Be Informed on Compensation and Advisor Fees

Ask your potential advisor about their compensation method. It’s important you know whether compensation is on an hourly basis, by commission, or as a percentage of assets under management. If compensation is a percentage, the fees should be under one percent annually.

Learn more about understanding the compensation when searching for a financial advisor.

4. Ask for Recommendations

A financial advisor should be prepared to provide recommendations. Ask to speak with their clients and request to speak to clients whose needs are similar to yours so you can get an idea about whether the advisor is the right fit for your unique retirement needs. If the advisor refuses or can’t provide any recommendations, consider walking away.

5. Request an Investment Policy Statement

Many advisors prepare an investment policy statement, which outlines in detail how he or she will meet your individual investing and financial portfolio objectives. If they don’t provide the statement, as the advisor to put something in writing why the investment is best for you.

If the financial advisor is recommending a specific investment, make sure he or she can explain the investment to you in terms you understand. It’s important that there’s open communication and investment education so that you are fully informed of what is happening to your assets. Some advisors get a percentage of investments sold, so you also want to make sure the investment is right for your specific needs.

7. Take Advantage of Retirement Investments

Even if you’re in your 50s, there’s still time to earn returns on investments. The key is to learn which investments offer advantages and disadvantages that are favorable to your particular situation and investment portfolio.

An investment advisor can help you strategically plan which investments will most likely give you the best return, but make sure you have a focused plan on these investments specifically for payout in retirement:

Learn more about specific senior retirement investments and general wealth-building investments to discuss with your potential retirement financial advisor.

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