“Building an expert team to guide you through the often bewildering and frustrating financial landscape is a crucial task if you are a pre-retiree or already retired.”-Eric Coons
“Do-it-yourself” retirement planning is certainly possible, even if it’s probably not a great idea. The current IRS tax code, for example, is around 2,600 pages long. Then there is an additional 60,000 pages of rulings and case law included in the Tax Register that tax attorneys and CPAs must know. So I guess that you, along with most normal people, don’t want to spend your days and nights immersed in tax law.
Adding to this regulatory quagmire are the hundreds of regulations, requirements, and protocols surrounding Medicare, Health Savings Accounts, IRAs, and 401(k)s. Finally, there are many paths to achieving the desired outcomes for retirement and an overwhelming array of product choices and options to consider.
Most people want and need a guide to help them avoid making potentially devastating mistakes in planning their lives after work. However, the problem is how to find the right person for each phase of your financial life. Not only do you want someone experienced, honest, confident, and competent, you also want someone who shares your values, understands your risk tolerance, and meshes well with your personality.
After working with various clients over the last twenty-plus years, I have determined that the best financial planners have all (or most) of these qualities.
They are agile, flexible, and creative. Effective advisors are not married to conventional or traditional planning. They understand their clients are individuals with unique points of view and needs. These advisors listen to their clients, then design customized blueprints that creatively meet their needs and expectations. When things do not go as planned, they don’t panic but quickly pivot to a new strategy.
Great advisors are client-focused.
Whether an income and retirement specialist is fee-based, fee-only, or works on commission, they should still operate according to fiduciary principles. Fiduciary standards mean an advisor is committed to acting in the best interests of their clients every time.
Great advisors are specialists. Distribution planning is a very different process than accumulation planning, with nuances, products, and techniques most accumulation-focused planners don’t understand well. Generalists are typically great at leading you up the mountain, but many of them don’t know how to get you down. So even if you already have a trusted advisor, when you are 5-10 years away from retirement, you’ll probably need someone specializing in income distribution.
The best advisors are process-driven. There is indeed no “one-size-fits-all” approach to retirement and income planning. However, top advisors have procedures and protocols to ensure efficiency and smooth the onboarding and implementation processes.
Your advisor should be financially successful. You’d think that would be a given. Sadly, it’s not. A great many planners are barely scraping by, waiting for that next big commission check. Financially-strapped advisors can be a considerable liability because their need for income may cause them to put their clients in riskier products to gain higher commissions. It would help if you were not afraid to ask your advisor about their track record of success and exactly how they are compensated.
Your advisor should have a sterling online reputation. Before you even meet with your advisor in a live situation, you need to do a thorough internet search. If you find negative or questionable information, write it down and ask your advisor candidate to explain. A negative review is not necessarily a deal-killer, but you want to hear the advisor’s side of things.
If you find NOTHING about the advisor, proceed with caution. An advisor with no online reputation may have less experience than stated, be hiding something, or be too lazy to promote themselves.
Summary: Partnering with a trusted advisor can be one of life’s most important decisions. That’s why you need to take the time to do your due diligence, research potential candidates, and find someone who has solutions that resonate with your attitudes about retirement. Don’t be afraid to dig deep, ask questions, and refuse to take anything at face value. It took you years to accumulate your wealth. You don’t want to take a chance on giving it to the wrong financial professional.