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Making Your Retirement Healthier – Are you Nervous About Getting Financial Advice?

By Michael D. Bird, CFP®, MBA

Making Your Retirement Healthier - Are you Nervous About Getting Financial Advice? For many people, finances are a necessary evil.  And financial advisors are assumed to be “evil sorcerers.”  I like wearing hats, but none of them are pointy.  Nor do I have a beard.  None of the advisors that I know look like the wizard Gandalf, nor the evil Saruman from the Lord of the Rings.  All of that to say (write) that advisors are people that have agreed to help clients with their finances but their good deeds are not always seen well.  And yet, there are clients that are desperate for help and cannot find those good advisors.  Or as the wizard said in the Wizard of Oz, “good deed doers.”  How can someone that is looking for help, find someone that is really wanting to help?

You may want to start by looking for a class that’s offered in your area.  There’s lots of financial information in the world and learning about the things you really struggle with would be a good start.  By learning you get information that will help you to distinguish between someone just offering a product with a sales pitch, versus someone trying to solve a problem.  And if you can’t find a local class, go to a free class online.  Khan Academy has any number of offerings in the Economics and Finance area, including Interest and Debt, Housing, and Investment Vehicles, as well as many others.  There are many offerings; go to the website www.khanacademy.org and see what may help answer your questions.

Another thing to consider is talking with your friends about advisors they’ve worked with in the past.  Of course, you will want to make sure they deal with your particular area of concern.  For example, if you have questions about Social Security Benefits and getting a benefits analysis, you may want to work with someone a little older that will have the experience and appreciation for your questions or concerns.

What if you don’t have friends with a good referral?  Through the Financial Planning Association and its Planner Search tool, you can find Certified Financial Planners in your area.  Just go online to www.plannersearch.org.  These are advisors that abide by a code of ethics which requires them to put the client first. So, in recommending solutions, the CFP designated advisor would recommend those solutions that are in the best interest of the client.  For example, instead of recommending an investment because it pays the highest commission, you will get a recommendation for the investment that would be better for you.

You may want to know the difference between a CFP® certificant and a stockbroker.  The planner is someone that can look at your entire financial picture and show you how it all fits together.  A stockbroker may do that, but may not, as they are not held to the same standards. And my intent is not to denigrate stockbrokers, just to highlight the potential difference.  What about other designations?  Some are very specific and may be concentrated in an area that interests you.  But when it comes to comprehensive planning and an overall view of your financial life, the CFP® designation is still the gold standard.

If you find someone, how do you know if they have been disciplined for something, or if their credentials are still valid?  One way is to look online at www.brokercheck.finra.org and check their disciplinary record and their work history.  All of that (and more) is available for you to see.  For their designation, go to the governing organization (e.g. the CFP Board of Standards for CFP®).  Check to see if they are still current.  I knew of one advisor that used a credential that was canceled several years before due to his behavior, but he was still using it.

You may also consider how the advisor gets paid.  There’s nothing wrong with asking.  If the advisor isn’t willing to tell you, that’s a potential concern.  If they are vague, that’s another concern.  We all want something for free, but the reality is that advisors have families and bills just like everyone.  You wouldn’t want to go to work and not get paid for your expertise and service, and neither should they.

An advisor is there to help you to see your financial life and help you to see it more clearly, too.  They can help you with your blind spot(s).  They should be someone with the experience, education and ethics to do what’s right for you.  Unfortunately, it’s not always easy to know who’s who. By looking at their ethical standards, disciplinary history, designations and how they have helped your friends, hopefully you can find the right advisor.  That advisor, and their advice, could be worth far more to you than a ring!

Michael Bird, a Financial Advisor with Secure Money Masters in Bristol, TN, is also an adjunct Professor of Finance and has taught at several universities and colleges, including ETSU, Belhaven College and the University of Memphis.  He currently teaches a course on Social Security and how to integrate Social Security benefits with Retirement Income.

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Investment Advisory Services offered through O.N. Investment Management Company

Disclaimer: This commentary is provided for educational purposes only. The information, analysis and opinions expressed herein reflect my judgment as of the date of writing and are subject to change at any time without notice. They are not intended to constitute legal, tax, securities or investment advice or a recommended course of action in any given situation as it does not address or account for individual investor circumstances. Please keep in mind that no single strategy is the best choice for all investors/retirees. Before investing, investors are encouraged to speak with a financial professional who can help evaluate decisions based on an investor’s complete financial picture and an investor’s time horizon and risk tolerance. Past performance does not guarantee future results.  An investment in stocks or mutual funds can result in a loss of principal.

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