Tranel Talks Column

5 Tips for Choosing the Right Financial Consultant

Financial stability is the cornerstone to a happy retired life. You may need more than just Social Security checks to live comfortably without supplemental income. According to the SSA, the benefits are only designed to replace about 40% of average workers’ wages during retirement.

As such, you may require the services of a retirement planner to help create a stable money cushion in your twilight years. It means conducting in-depth research to find the right financial consultant to keep your finances and investments on track with your retirement objectives.

Here are five factors to keep in mind when finding the right financial advisor for your needs.

1. Retirement Financial Goals

Before you speak with a financial consultant, you may need to get a clear image of your monetary requirements once you retire. Life expectancy is a critical factor in retirement planning, with the average American living an extra two decades after retirement. Determining the lifestyle standards you wish to maintain as you age can help you pick out a financial planner that aligns with your goals. Your retirement financial goals may significantly impact the investment products you pick and the risks you are willing to bear.

2. Fiduciary Standard

You may need to work with a financial consultant that puts your best interest first when providing financial advice or recommending specific investment instruments. Ethical and legal standards bind fiduciaries to act in their client’s best interest, in good faith, and to avoid any conflict of interest.

The best way to analyze their openness and allegiance is to inquire about the investment approach. Which investment offerings do they provide? What are the compensation protocols? A thorough background check is necessary, learning what other clients say about their financial planning services.

3. Qualifications

It’s essential to note that financial advisors provide more than investment advice, charting a course that fulfills all your retirement needs. Financial consultants can have many titles, such as financial advisor, wealth manager, retirement planner, etc. Most are registered as brokers and investment advisors, monitored by different government regulatory bodies such as FINRA, SEC, etc. Picking a Certified Financial Planner can give you peace of mind that you have a professional understanding of all core aspects of financial planning.

4. Compensation Plan

Financial advisors often have different compensation models for their services. You may opt for a commission-based consultant, fee-only financial advisor, or fee-based payment model. Commission-based consultants receive a percentage compensation from third-party agreements with the providers of the investment products. Fee-only financial advisors only receive compensation from their clients, with the fee charged being either hourly, percentage assets under management, retainer, or a flat fee. Fee-based advisors utilize a mix of both, a partial payment direct from the clients and commissions earned from the products they sell. You may need to look out for fee-only financial advisors, as they may not have a conflict of interest regarding their earnings.

5. Practices

It’s important to determine how the financial consultant you are hiring operates in terms of its services. Financial planners provide three primary functions; they research investment products, create financial plans, and implement them for their clientele. Some may offer additional services like debt management, tax planning, or retirement income strategies. You need to determine whether one service provider can meet your needs, or you will require multiple advisors to act on your behalf.

Picking the right financial advisor for your needs is essential for a comfortable retirement. As you take steps in planning your financial future, be sure to check out each aspect of their services before hiring them. Remember that it’s not just about investment returns but a holistic approach that will help you achieve your goals and grow wealthy in the process. It’s never too late or early to start saving for your future. Schedule a meeting with a certified financial consultant at The Tranel Financial Group today.