Retirement Income Blog

Realize first that the term “financial advisor” is a generic term  much like “retirement advisor“and can mean almost anything.  In fact, most “financial advisors” make commissions by selling products. Which means that while they may be sincerely interested in helping you, they earn nothing until you buy something.  So if you want advice and not products, that you want to engage a financial advisor and pay for their time and find a financial advisor just as you would an attorney or a CPA.

The first thing you would do to find any financial professional is to ask people you know and trust.  Ask your CPA, attorney your banker.  Be careful–are they giving you the name of a sales person or advisor?  If you want advice, then you want a fee-only financial advisor.  Some fee-only financial advisors are members of NAPFA.org and you can get local referrals from them. You can also get a referral from the local Financial Planning Association.  These referrals would be the same as using a lawyer referral service.  There is no guarantee of quality using such a referral service and while an option, may not be the ideal way to find a financial advisor.  but if you get several such referrals. you can compare.

Next, check them out on their web site.  Does their philosophy and tenor strike a cord with you?  No web site?  Then pass.  Any financial advisor without a web site is not worth considering as a professional. 

After talking with people you trust, getting referrals, checking out the web sites of advisor referred, you will hopefully have a couple candidates that look like a fit.  Now, check their background–a critical step to find a financial advisor.

Ther first check is at http://www.finra.org/Investors/ToolsCalculators/BrokerCheck/index.htm.  At this site you can check their status with FINRA, the organization that licenses them to earn commissions (if they are so licensed) or their status as a registered investment adviser (a required certificate if they charge fees).

They likely also have an insurance license so locate the State Department of Insurance web site and you will find a way to check agent licenses there.

Additionally, the financial advisor may have credentials such as certified financial planner(tm), registered financial consultant, certified retirement planner, etc.   If they have credentials, you will be able to check the status of their credentials with each of the organizations that has granted the credentials as follows:

CFP(r) http://www.cfp.net/search/
CPA — a state by state check — look on the web for your state Board of Accountancy
ChFC - There is no complaint or disciplinary process for either the ChFC or CLU designation so there is no way to check on these folks (YIKES!)

Interview your advisor and ask the following questions:

What’s your investment philosophy?
What percentage of your clients are people like me?
How do you charge?
What is your communication model–how frequently and how do we communicate?
What are your specialties?
In addition to your specialities, can you help me with (fill in issues of concern to you)

Because the relationship with a financial advisor is important, completing the above steps to find a financial advisor, while cumbersome, is worth it.  And if you do it well, you only need to do it once.

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Who can you trust? That’s a major concern for retired investors.

You don’t want someone who simply “has a job” in the financial services industry who sells products and services. You want a professional retirement advisor who has made the commitment to competency and high standards to serve their clients at the highest levels. Certified Retirement Financial Advisor graduates have made that commitment to stay educated and knowledgeable about the solutions to the financial challenges of retirement. And if the Certified Retirement Financial Advisor graduate does not have the expertise in an area important to your circumstance, he can access his network of other professionals in the community to assist him in specialty areas, including:
. CPAs for tax consultations
. Attorneys for legal issues or document drafting
. Property and Casualty Insurance agents to insure you have adequately covered your risks
. Life, health, disability and long-term care specialists
Why choose a financial advisor who is NOT a Certified retirement Financial Advisor graduate? 
 
What is a Certified Retirement Financial Advisor?
A Certified Retirement Financial Advisor is a financial professional who has completed a program of study on the financial challenges faced by retirees. The program is designed for experienced financial professionals who learn solutions to those challenges. Before enrolling in the Certified retirement Financial Advisor program, many graduates already hold credentials such as Certified Public Accountant (CPA), Certified Financial Planner (CFP®), and Chartered Financial Consultant (ChFC). Upon course completion, graduates pass a closed book exam, agree and sign the Society of Certified Retirement Financial Advisors Code of Ethics, and are then permitted to use the Certified Retirement Financial Advisor designation. In addition to any other continuing education credits that graduates must obtain for any other licenses or certifications they hold, to retain their Certified Retirement Financial Advisor credential, they must annually complete 15 hours of study specific to retiree financial issues. 

Different graduates may have different focus of expertise,.  While one may be a specialist in health insurance coverage for retirees, another may be a specialist in retirement financial asset management.

What is the Society of Certified Retirement Financial Advisors?
The Society was formed to set standards, maintain the educational curriculum, provide opportunities and programs for continuing education and monitor the quality of the Certified retirement Financial Advisor program. The Board of Standards comprises individuals from the financial services industry with 10 or more years serving retirees.

Certified Retirement Financial Advisor study includes the following topics. The list of topics is continually expanding as additional issues become important to retirees, tax laws change, or the economic environment changes, requiring a need for additional education.
 
Topics
. Asset Harvesting to Last a Lifetime
. Asset Allocation Appropriate for Retirees
. Taxation of Social Security
. Deductibility of Medical and LTC Premiums
. Tax Deferred vs. Tax Free
. Protection of Principal and Guarantees
. Advanced Directives and Trusts
. IRA and Retirement Plan Distribution Planning
. Health and Finances—Long-Term Care
. Estate Planning and Asset Preservation
. How to Construct Fixed Income Ladders for Consistent Income
. How to Construct and Protect Retiree Investment Portfolios

The Society of Certified Retirement Financial Advisors has established a Code of Ethics for graduates. The Code embodies five fundamental principles of ethical conduct. Graduates promise:
1. To conduct their business according to high standards of honesty and fairness and to render that service to their clients so that any “prudent man” would agree that their conduct and business practices are beyond reproach.
2. To provide competent and “client centric” service. If products or services do not fit the prospect or client, they will identify that fact as soon as possible and withdraw.
3. Seek to make a comprehensive review of your financial circumstances and make appropriate referrals to other professionals for services beyond their expertise. In other words, seek to protect your financial well-being, whether or not it is within their specific area of expertise.
4. To provide prompt handling of your financial affairs and immediately address client concerns, dissatisfaction, or complaints.
5. To advertise honestly, to use appropriate sales materials and presentations

The typical graduate will use a variety of tools to provide solutions including retirement planning software, a deferred or immediate annuity calculator, monte carlo simulations and retirement income estimation projections.

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