Retirement Income Blog

Selecting the right retirement financial planner is important to you.
Here are questions to ask a retirement financial planner candidate that will help distinguish one from the other.

1. What experience do you have with retirement financial planning?
Find out the percentage of his clients by age category.  You want to make sure that the bulk of his clients are similar to you so that he has experience in actual planning for people like you.

2. What are your credentials and what do they mean?

There are retirement financial planners with great credentials that are not that competent and vice versa.  But credentials do illustrate an individual’s willingness to engage in further learning and take on additional work.  Find out what work was required to earn each credential as there are some credentials in the financial services industry that have little value.

3. What services do you offer?
Likely, you need assistance with retirement income planning, tax reduction, budgeting, possibly estate planning and portfolio management.  If his list of services does not match your needs, then move on to another retirement financial planner candidate.

4. What is your approach to retirement financial planning?
When you ask this question, you look for a thoughtful systematic approach.  It might sound like this:

1. First, we estimate the income you will need in retirement based on your desires.
2. Next, we calculate the sufficiency of your current financial resources to achieve that income.
3. If the resources are insufficient, then I present you with alternatives to fix the deficiency as best we can.
4. Next, we document a spending plan, a retirement plan that takes into account which pots of money get used first, tax minimization and a portfolio design.
5. Then we implement what you agree on.
6. Last, we meet every 6 months to review progress and account for any changes in your desires or circumstances.

If the retirement financial planner cannot easily state their approach in a concise and chronological manner, find a professional that will.

5. How can I tell that you’re competent?
Don’t be afraid to ask this challenging and direct question to a prospective retirement financial planner.  If he cannot give you an answer that inspires confidence, then why trust him with your financial future?

6. How will I pay for your retirement financial planning services?
As part of your financial planning agreement, the financial planner should clearly tell you in writing how she will be paid for the services to be provided.

Retirement Financial Planners can be paid as follows:

• Fees based on an hourly rate, a flat rate, or on a percentage of your assets
• Commissions paid by a third party from the products sold to you to carry out the financial planning recommendations.
• Commissions are usually a percentage of the amount you invest in a product.
• A combination of fees and commissions whereby fees are charged for the amount of work done to develop financial planning recommendations and commissions are received from any products sold.

In addition, some planners may offset some portion of the fees you pay if they receive commissions for carrying out their recommendations. You would prefer to deal with a professional that works on a fee basis rather than commissions that may be “buried” or hidden in products.

7. I have assets of  $xxxxxx.  How much do you typically charge someone like myself and what are the components of those charges?
This question gives clarity to the answer from question 6.

8. Will my retirement financial plan look like those for your other clients?
If the planner tells you everything is totally customized, be ready to pay a fortune or the planner is not being honest.  If most of the retirement financial planner’s clients are between age 55 and 65, then the plans SHOULD look similar from one another as people in the same circumstances have similar retirement planning issues.  It’s the similarity among the retirement financial planner’s clients that gives him the experience you desire.
9. Have you ever been publicly disciplined for any unlawful or unethical actions in your professional career?
While you may think this is an important question, there is no reason to ask it as you can get this information on the Internet.  The planner is either responsible to the SEC, FINRA and/or the State Department of Insurance.  All 3 list disciplinary records and in 15 minutes, you can check the background of any potential retirement financial planner.

10. What do I get in writing?
If the retirement financial planner offers little in witing, walk.  At minimim, you should get a list oif fees and services, disclosure of any conflicts of interest, a written plan and an investmemnt policy statement.  While these dont need to be lengthy, a reputable retirement financial planner will provide documents that serve these purposes.

Bookmark It