Mailbag Monday: Finding the Right Financial Advisor for You
I’m 48 years old. How can I find someone who can look at my finances and come up with a retirement plan without being my investment planner? Also, where can I check to make sure they are in good standing and properly licensed?
— Tara
There are financial advisors who charge by the plan and even by the hour, and it sounds like that is what you want: Someone to set you up, but not hold your hand. I’m going to recommend two resources: The first is the Garrett Planning Network, which is a group of fee-only independent financial advisors. That means they charge a set fee, not a commission or a percentage of assets under management. Garrett Planning Network advisors will also work on an hourly basis, meaning you can contact a network planner for one or two hours of guidance instead of comprehensive planning services. This may be a good fit for you.
You can also do a search on NAPFA.org, another great association for quality fee-only advisors. Advisors found through both sites will have the proper certification, but during your first meeting, you can ask for the advisor’s ADV Form, Part II from the Security and Exchange Commission. It will tell you how the advisor is compensated and list any conflicts of interest – including whether they are earning a commission for recommending certain investments. You should also ask for references – and call them. And if you have friends or coworkers who work with an advisor, you might ask around for recommendations. Coworkers in particularly can be helpful here, because they’re likely to have similar financial situations to your own, including the same 401(k) plan and other benefits.
Finally, I heavily weigh whether I feel comfortable with that advisor. Open, honest communication is important in this relationship, and if you can’t bring everything to the table — the good, the bad and the ugly — you’re not going to get your money’s worth.
