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Retiring Soon? Here Are 10 Questions You Should Ask Any Financial Adviser You Interview. Thumbnail

Retiring Soon? Here Are 10 Questions You Should Ask Any Financial Adviser You Interview.

If you are retiring soon and are exploring a relationship with a financial adviser, be sure to ask these 10 questions during the interview process.

1. Are you a fiduciary?

Fiduciaries work in the best interest of the client. Non-fiduciaries need only to recommend products that are “suitable” — even if they’re not the lowest-cost or most ideal for you. That’s why you want to know about the fiduciary rule and ask potential advisers if they follow that standard. At 80/20 Financial we are a Fiduciary Adviser.

2. How do you get paid?

Advisers can use a variety of fee structures. To keep it simple and avoid conflicts of interest, focus on fee-only or fee-based advisers. Fee-only or fee-based advisers might charge a percentage of the assets they manage for you (1% is common), or they charge a flat fee for services or an hourly fee. If you are being sold a product for your entire retirement solution you are dealing with a commissioned salesman only. See 80/20 Financial fees here. We are a fee-based fiduciary adviser.

3. What are my all-in costs?

In addition to paying the adviser, you could face other fees — and you’ll want to know what they are. Fees can decimate your savings over time. A NerdWallet analysis found that a 1% mutual-fund fee could cost you $590,000 in retirement savings. You can lose half your net worth without even knowing it. You want to be vigilant. At 80/20 Financial there are no hidden fees. See 80/20 Financial fees here.

4. What are your qualifications?

Financial professionals can have a confusing list of initials behind their names. The Financial Industry Regulatory Authority’s professional designations database will tell you what they mean; if there are any education requirements; if anyone accredits the designation; whether there’s a published list of disciplinary actions; and if you can check professional status.

You can click on Broker Check at the bottom right side of our website to look at our credentials. www.8020financialservices.com.  

5. How will our relationship work?

Put another way: How much access will you have to the adviser? You want to know how often you’ll meet and whether she’s available for phone calls or emails outside of scheduled appointments. At 80/20 Financial we would like to meet with our clients at least twice per year or more depending on your needs. We are always available by phone and you will have a client portal access via our website so you can see your investments at anytime you wish.

6. What’s your investment philosophy?

We provide easy to understand, competent retirement advice, tailored to each client. We work with a certain number of families to establish very specific financial goals for the attainment of wealth-as you define wealth, which can be anything from a retirement with no compromise in lifestyle, to the education of all your grandchildren, or anything you decide. That part is up to you. 

Then together, we make a financial plan for the realization of those goals. Finally, we then devise a specific portfolio strategy that is appropriate for the execution of that plan. So in review, it's goals, plan, strategy, execute.

7. What asset allocation will you use?

You’ve heard how important it is to be diversified, right? Your asset allocation is how you create a diversified portfolio. You don’t want someone who is just going to pick U.S. large-company stocks. Your portfolio should include domestic and international stocks, and small-, mid- and large-cap companies. At 80/20 Financial Services we invest your money in various mutual funds based on what your lifetime retirement goals are. We do not advocate investing in single stocks as it relates to your retirement nest egg.

8. Who is your custodian?

Ideally, your financial adviser has hired an independent custodian, to hold your investments, rather than act as his or her own custodian — à la Bernie Madoff, the notorious financial adviser who defrauded clients through a multi billion-dollar Ponzi scheme. That provides an important safety check.

We use Shareholders Service Group a subsidiary of Pershing Financial for our custodian and clearing house. They work exclusively with independent advisers like ourselves.

9. How does Tax Planning play a role if I invest with you?

This helps ensure the adviser has your tax bill in mind when making financial decisions. And asking about taxes is a way to explore what your estimated net return might be. Taxes should always be considered in any Financial Plan.

10. What is your promise to me?

Many salesman will promise you the moon and stars to get your money. At 80/20 Financial we aren't salesmen. We are teachers and here is our promise to you.

Contact us today for a no obligation second opinion from someone you can trust.

Brian Coleman/Retirement Planner/Investment Manager