Finding Your Right Advisor

Finding Your Right Advisor

Seeking the right advisor is one of the six pillars in a retirement plan designed for success. It is crucial that you are provided a holistic and specialized approach to retirement, using a clear process designed to help you achieve a financially independent lifestyle. When you are searching for the right financial advisor, you can use this list to help find a good fit for your retirement planning needs.  

1. They are a fiduciary.

We can’t stress this enough!! Why would you work with someone who doesn’t have your best interest in mind and have the ability to make their decisions based on their own best interest, not yours? A fiduciary is someone who is legally obligated to put your best interests first. Many advisors have the ability to legally recommend a product that might be suitable for you, even if it is not the best possible option for you. If you want to find out if an advisor is truly a fiduciary, ask them these questions:
  1. Are you an independent firm? Independent firms are able to work freely without any product requirements or limitations, without limit of options.
  2. Are you an RIA (Registered Investment Advisory) firm? This means that they are purposely structured and have a fundamental obligation to be a fiduciary. They are also registered with the SEC (Securities and Exchange Commission) or state they reside in.
  3. Are you going to be operating under fiduciary guidelines 100% of the time? Many advisors wear both hats and claim to be a fiduciary while operating under suitability standards. Ask them if they will be operating under suitability standards at any point during your journey with them.

2. They have a clear and in-depth process.

Many in the industry do not have a specific and in-depth process that is used for every client. You will often find the “services we offer” page posted on their website, rather than an explanation of the specific process they use to compose a full retirement plan. An advisor should not be focused on having a product or tool for everyone to purchase, but rather on designing a plan using a specific process that covers all aspects of retirement. Do not seek someone providing just one or two pieces of the puzzle, leaving you to piece together the big picture. Find an advisor who will piece together all of the puzzle pieces for you, leaving you with the full and holistic plan designed for a financially independent lifestyle in retirement.

3. They have a strong team.

A superior team surrounding the advisor is crucial because it allows the advisor to focus solely on you! When you choose an advisor, you are not deciding to only work with them, but their entire team! A team can handle the day-to-day operations, support you and your policies, manage the accounting, and run the “business” side of a firm. It is important that an advisor is not focused on too many areas of the business – from accounting to managing operations or tracking event registrations. There is only a limited amount of time each day, and they should be focused on you!

4. They provide a written income plan.

Unfortunately, there are pre-retirees that may never receive a written income plan. It should be one of the first things reviewed. An income plan includes all of your income streams, projections, and identifies income gaps. It identifies how long your current income situation will last, and the advisor uses tools to fill in the gap between what you have and what you will need. This is one of the most useful tools you can have in your retirement plan!

5. They create a long-term care & health plan or bring in a trusted advisor into their office that specializes in this field (2-3 minimum hedging strategies are needed to keep your retirement in your nest egg).

This helps prevent your assets from going towards health care costs. The average individual pays $400,000 in health care costs throughout retirement. Thankfully, there are strategies to help limit this expense. This should be reviewed in depth. It often takes two or more visits to review this information and implement a strategy in place to hedge against this loss, as it is a complex piece of the retirement puzzle.

6. They either create an estate plan themselves or bring a trusted estate planner into their office to ensure your legacy is protected.

Having an advisor that plans to regularly communicate with your estate planner (if they do not have one in their office) is extremely important! First ensuring that you have a proper plan and then consistently updating changes to your portfolio in your estate plan or trust is crucial. Did you know that the average inheritance is spent within 17 months*? Or that inheritances may be mostly lost to taxes or lawsuits from other family members? Protect your legacy to prevent this from happening to your life’s earnings.

7. They create a tax plan.

After going through the process with an advisor, you should know exactly which tax bracket you will be in, including after one spouse dies (if applicable). You should also know your income streams both before and after the death of a spouse. A tax plan includes other strategies to decrease your tax liabilities – strategies separate from investments. Tax-free income is a powerful leverage that many can use to mitigate tax loss and bridge the gaps between income deficits. There should overall be several solutions implemented to mitigate risk and tax loss!

8. The advisor specializes in retirement.

Remember that this is a very unique phase of life, and it can be very important to work with someone who specializes in retirement. The strategies in retirement, and the other surrounding life events, tools to use, etc. vary greatly from the tools and strategies used in your working career! It does not mean that non-retirement advisors are bad. When you transition from a pediatrician to a general practitioner, it did not mean that you thought your pediatrician was a bad doctor or person! It just meant you had transitioned into a different phase of life and needed a different type of specialist.

9. You like them!

This is a long-term relationship, so it is important that you get along well with the advisor and trust them! They will know every detail of your life, from your health conditions to your family relationships. Ensure that you enjoy being around them and their staff. At the same time, the advisor should take time to get to know you and also enjoy being around you! *

Investment Advisory Services offered through Trek Financial LLC., an (SEC) Registered Investment Advisor. Information presented is for educational purposes only. It should not be considered specific investment advice, does not take into consideration your specific situation, and does not intend to make an offer or solicitation for the sale or purchase of any securities or investment strategies. Investments involve risk and are not guaranteed, and past performance is no guarantee of future results. For specific tax advice on any strategy, consult with a qualified tax professional before implementing any strategy discussed herein.