by Jeff Lido, Financial Adviser and Smartvestor Pro
If you’ve heard it once, you’ve heard it a thousand times: You need to invest for retirement, especially if you want to retire early.
That means, at some point, you’re going to need a financial adviser—someone who can explain complex investments in terms you can understand.
Finding the right professional may seem intimidating, but it’s not that difficult. You just need to remember a few things.
What is a Financial Adviser?
Simply put, a financial adviser is a qualified professional who will help you understand your retirement, college savings or other investment goals. A good pro speaks in terms you understand and is committed to educating and empowering you to make decisions about your financial future.
Manage Your Own Money
No one else will feel the regret and pain of losing your hard-earned money like you will. Some celebrities and pro athletes lose their entire fortunes because they let other people manage their investments for them. It’s your money and your future, so don’t be shy about taking charge of it!
A good adviser is smarter than you are about investing, but knows you still call the shots. If an adviser wants you to do something simply “because they said so,” find someone else to partner with. You aren’t hiring a parent—you’re gathering counsel.
Hire Someone Who Helps You Make Smart Decisions
You can’t make an informed decision with your money if you don’t understand what you’re investing in. That’s why it’s important to look for an ace who takes time to help you learn about your investments.
Avoid sales-minded pros or “experts” who make you feel dumb for asking questions. The right financial adviser will explain every detail to you until you get it—no matter how long it takes.
Know How Your Financial Adviser Is Paid
When evaluating a potential financial expert, make sure you know how they will be compensated. In other words, are they on a commission or are they fee-based?
There are positives and negatives to each approach, and professionals on either side have extreme levels of integrity. Just watch for possible conflicts of interest. If an adviser won’t give you a straight answer about how they’re paid, then you may have a problem.
If It Doesn’t Feel Right, Walk Away
If something doesn’t feel right about a potential adviser, then keep looking. Hiring an expert can be difficult, and you have to feel good about the relationship. Interview as many pros as it takes to find someone you can trust to educate you on your options so you can make investment choices that are best for you.
Keep all of this in mind when you’re hunting for the right financial expert, and you’ll be on your way to building a retirement strategy you can feel good about.
Know the Jargon
With so many financial titles and certifications out there, it may feel like you’re eating alphabet soup. CLU, CPA, CFA, CFP, etc. These are just some of the letters you may see after an adviser’s name. But, what do they mean? Some focus on investments, some on taxes, some on financial and retirement planning. Ask what certifications your adviser has and in what areas he or she is an expert. Most importantly, ask how it may be beneficial to you.
Who Do They Work For?
Knowing whether an adviser is looking out for your best interest isn’t always clear. Different advisers are held to different regulatory standards, depending upon how they handle your money. One very important question to ask is whether your adviser is a “fiduciary”. This means your adviser must legally look out for your best interest above all else.
