Ep. 116 – 4 Steps to a Healthy, Financially Secure Retirement

When looking to hire a financial advisor, what are some of the things you need to be aware of?

Hiring the right financial advisor for you all comes down to knowing what you’re looking for, what you’re paying for, and whether the person you’re working with knows what they’re doing.

In this episode of the Secure Your Retirement podcast, we cover the 8 questions you need to know positive answers to from a potential financial advisor before hiring them.

In this episode, find out:

·      Make a commitment to yourself to get your checkup done.

·      List your objectives on the type of relationship that you want to have with a financial advisor.

·      Ask questions – eight questions you need to know answers to from a potential financial advisor.

·      Meet and sit down with the advisor you choose to hire to get to know them at a personal level.

·      Ensure you get something in writing as far as a contract that states relevant terms.

·      Understand the difference between a certification and a title.

Tweetable Quotes:

·      “If you have a list built out in front of you, take that to your advisor meetings as you’re searching for that person to see if they match up to what you’re looking for.”– Murs Tariq

·      “The number one reason why a person will leave their financial advisor has nothing to do with performance, it has everything to do with communication.” – Radon Stancil


If you are in or nearing retirement and you want to gain clarity on what questions you should be asking, learn what the biggest retirement myths are, and identify what you can do to achieve peace of mind for your retirement, get started today by requesting our complimentary video course, Four Steps to Secure Your Retirement!

To access the course, simply visit POMWealth.net/podcast.

Here’s the Full Transcript:

Radon :Welcome everyone to our Retirement in Action podcast. Today, we are going to finalize what we have now done for a few weeks, not back to back, but we’ve been doing a podcast, how to choose the right financial advisor for you. And we’ve really taken people through an entire process. Things that need to be aware of, mistakes that could be made. And today we’re going to do one that is called four steps to a healthy financially secure retirement. You think about that. That’s what everybody wants, is they want to have a healthy, financially secure retirement. And Murs and I have been talking through some of the mistakes that people make. And so we want to talk about now what to look for if I’m going to go out there and pick this advisor, what are things that I need to make I am aware of? So we’ve basically got four steps that we’re going to walk you through.  
 And again, if you’re listening to this and you’re thinking, oh my goodness, I can’t take notes. Don’t worry. We have a blog article on this very, very topic. And it is right on our website. So you can go to the blog page and get access to this particular topic. So step number one, make a commitment to yourself to get your checkup done. Now, you think about that. I’ll tell you this. I was talking about it the other day. My wife was like, you need to go get your physical with your doctor. And I was like, yeah, well, I mean, it’s not like I got to do it right now. So we started thinking about how long had it been since I got my physical and it had been somewhere around five years. And that’s just one of those things that you procrastinate.  
 Some people do, I did, did not really, really want to do that. Well, the same is the case when it comes to our financial wellbeing. And sometimes people just put it off. Maybe you think I’m going to do it once I get all my statements together, or I’ll do it when I actually figure out how much money I spend, or I’ll do it when I get closer to retirement. Here is the thing that I think I want us to make sure that we encourage you to do is that you want to set a goal.  
 Now we’re not saying tomorrow, but if you say, look, I’m going to get my checkup done in 30 days, 60 days, 90 days, I don’t care. You set a goal and then you work toward that. And even if, Murs and I get people in the office all the time that do not have all their stuff. Right. But we still get started. And then they still, oh, okay. I now know where to go get this. I know how to go handle this. So I’ll just say it again, make it a point. Schedule it. Even if it’s 90 days out, go ahead and schedule it to get your checkup done.  
Murs Tariq :Yeah. I think that is very important. Just getting it scheduled and then following through with that. I love the story about the physical. For me it’s my dentist, right? It’s very hard to keep up with trying to see your dentist every single year. My eye exam, they kind of force me into it because I wear contacts. And so I run out of contacts and the only way to get more contacts is I have to go see the eye doctor again, but the dentist that’s kind of on you just like finances so. Step number two that I have for you is list your objectives. And this is not listing objectives from the sense of what you want your retirement to look like and how that’s going to play out and when you want to retire. But that’s all going to come with once you’ve figure out how you want to work with a financial advisor or if you want to work with one at all.  
 So listing out what type of relationship you are looking for, for financial advice. Is the relationship that you need primarily just signing up for a newsletter or is it just utilizing Google and kind of doing it yourself? Or maybe you’ve decided I do need to work with a financial advisor. I need someone to take this off of my shoulders. This bearing weight that’s going to help me answer the question of, do we have enough? And when can I retire? And what’s my retirement going to look like? And then we’ve already talked to you quite a bit. There’s different types of advisors out there. And so you have to make these objectives as to what are you looking for in an advisor. There’s advisors out there that are very product based, there’s advisors out there that are very holistic planning approachd and they look at the whole scenario like investment management, like the retirement planning, the tax strategy, the estate planning, everything that comes with retirement and it’s very important to retirement.  
 Other objectives could be, Hey, I would like to work with a fiduciary or maybe that’s not that important to you. I hope working with a fiduciary at the end of this series has become pretty important to you. And then you can ask yourself, does a certification sway me one way or the other? Radon and I, we’re CFPs, we’re certified financial planners. And we have a lot of clients that come to us for that reason because they know that we’ve done the education and the hard work to get those credentials. Some of those other credentials just don’t stack up. Not saying that they’re not valid, but you got to ask yourself, what are you looking for in that arena as well. And then we’ve talked to you several times here on fee as to how advisors get paid in different scenarios when it comes to the product that they’re selling or the investment that they’re selling or the fee that they’re charging for planning.  
 So you got to ask yourself, what is the objective here? What’s going to feel like it’s going to serve you the best. And then also understanding the value that you are getting for the fees. So just a few things to think about when you’re listing objectives. If you have that list built out in front of you and you take that to your advisor meetings as you’re searching for that person to see if they match up with what you’re looking for.  
Radon :All right. Very good. Step number three, ask questions. So now imagine that you’re either researching for a financial advisor or you’re talking to one. I’m going to give you eight questions. And remember what I said earlier, there’s a blog article on this, on our website. It’s going to have all eight questions there for you. So do not worry if you’re trying to take notes, but these are questions that could be tough. They could be tough for the financial advisor if they’re not able to answer these in a positive way, but you need to know the answer to these questions and it’s extremely important. So I’m going to take you through all eight.  
 Number one, you need to ask, do you work as a fiduciary? Do you work as a fiduciary? Now be careful to listen to the answer because if they say, oh, I treat all of my clients as a fiduciary, that’s a play on words. You want to know are they legally bound to act as a fiduciary on a fiduciary standard for you? That’s just now, by the way, you may decide to work with someone who’s not a fiduciary. That’s okay, but you want to know. And by the way, I don’t know why you would not want to have a person be a fiduciary because a fiduciary is bound by law to put your interest ahead of their own. But if you find somebody who you like, and they’re not a fiducuary, it’s not a law that you have to be a fiduciary, but that is an important question.  
 All right, second question. Are you registered with our state securities regulator? Now this one’s important because of scams and a Ponzi schemes. If the person is not registered or can’t show you that they’re registered with the state securities division, that might be a red flag, meaning that whatever they’re offering to you, it’s not done properly. So keep that one in mind.  
 Number three, how long have you been an advisor? That’s going to give you a sense of where their knowledge is. If they say, Hey, I’m just starting out. That might be okay if they work right along with an experienced financial advisor, but at least again, these are things for you to know. Number four, and Murs just talked about this a little bit, but what are your credentials? Are you certified as a financial planner? Again, not a law that you have to be, but it gives you a good indication. Have they looked at things in a well rounded approach.  
 Number five, how do you get paid? Extremely important. Do the fees come out of whatever it is that you’re in or do you pay them directly? Are you paying them hourly? Is it a percentage of whatever they’re managing? Number six, what is your investment philosophy? Now, if they cannot answer that or they don’t answer in a way that you feel confident, that is a big red flag. So if they tell you, Hey look, you don’t invest looking at it that way. You just buy and hold and hang in there. If you believe in that, great. But if you say to yourself, Hey, I want to have downside protection that may not be that attractive to you.  
 Number seven, do you make money for trading mutual funds or stocks? Meaning are they going to get a commission to do that? That’s not as common as it used to be, but it still can be there with mutual funds through the version of commissions. So keep that in mind. And then number eight, how frequently do you communicate with clients? I will tell you there’s many studies that are done and the number one reason why a person will leave their financial advisor has nothing to do with performance. It has everything to do with communication. So you want to know, and by the way, when you ask them that, how often do you communicate, tell them what type of communication do you do. Get a little bit of detail on that. That’s all I’ve got on step number three.  
Murs Tariq :All right. On step number four, it’s really once you’ve made that decision of, yes, this is the advisor that I’m going to work with. Well, then you start meeting with them and we always encourage, it’s always nice I think to meet and sit down with someone that’s essentially, you’re starting this brand new relationship with face to face, at least in the first phases of it, or maybe in one of the meetings every now and then, just to be able to get to know them on a personal level. And that’ll make you more comfortable. There are certain things that you don’t need to do face to face. Like you can, in my opinion, I don’t like going to the car dealership and dealing with car salesman. The last couple cars I bought, I’ve been doing through email. You don’t want to do that in this situation with your financial advisor when you’re talking about these life changing events and building out these retirement plans.  
 Yeah. You can do some information sharing, but at the end of the day, when you’re making decisions on your retirement future, you want to be meeting with them face to face. And then the second part of that is whatever you’re doing, make sure you get something in writing as far as your contract with them when you first sign up. Know what that contract is. Is there a term to it? Also, it should be documented as to what type of fees you’re going to be paying. Is it just a percentage of the assets that they’re managing? Are they commissionable products? Is there ever a way that they can charge you hourly? That should all be documented. When you’re going through, usually an advisor’s going to take you through a risk assessment or a risk tolerance conversation. Get that documented. We’re very quick to give that out along with our retirement financial plans, because at the end of the day, while we are the financial advisor, we say, this is more of a partnership between the client and the advisor.  
 And yes, we’re going to do the majority of the work here, but expectations need to be on the same page. And the only way to do that is have something written down on both sides so that you can both agree. Yes, we agree that this is how things should go going forward. And then when you have those annual reviews or those one off meetings here and there, you’ve got a reference to look back to, to say, Hey, we were going to accomplish these certain things and where are we at on there? Why haven’t we accomplished these yet? Or Hey, we’re way ahead of the game. And that’s even better, but you’ve got a resource there to refer back to. So getting things in writing is always going to be powerful.  
Radon :All right, this is kind of a footnote. It’s not a step. This is just a footnote to what we’ve been talking about. We’ve mentioned a couple of times in our conversation here about credentials, certifications. So what we want to make sure is clear is the difference between a certification and the difference between a title. And this has been quite controversial within the industry, is that anybody can pretty much call themselves a financial advisor. Now there’s some rules around that, but you’ll see it quite often, or they’ll call themselves a financial analyst, or a financial consultant, or a financial expert, or a financial planner, an investment consultant, or a wealth manager. That’s just simply a title. That’s like saying man, or woman, or whatever your title is. That’s not saying you’re qualified by any means to give advice.  
 Now, maybe the person’s been what we would call a wealth manager for 30 years, maybe their life experience has given them that ability to be able to make very, very good decisions. But there are some certifications that do hold out to a very rigorous education, continuing education, and an extensive test in order for them to do that. Certified financial planner, that is what Murs and I both are. And we picked that. We worked and said, that’s what we want. That’s the high standard within financial planning.  
 There’s also called a chartered financial consultant. That’s very much a rigorous type schedule to do that. Or a chartered life underwriter. They’re all kind of focused on different areas, but if you’re looking for a financial planner from the financial planning perspective, you can’t find something that’s going to give more education or overall substance to what it is that we do in that world than the CFP. So just keep that in mind. And you might go to the website. This person tells you there are some kind of certified something, go find out what it is because there’s some of the certifications you can just pay a fee and answer a few questions in a couple hours, and you’re called a certified whatever. So that’s just a little footnote. Anything to add on that Murs?  
Murs Tariq :No, I think that’s it. I think it kind of comes back to know what you’re looking for, know what you’re paying for, and know the person that you’re working with, what they are actually qualified to do. If you can sum all those three up, I think it makes the whole process of trying to find the perfect financial advisor for you. And once again, there’s a different fit for every person. Every family is different. Every situation is different, which is why there are different types of advisors out there. So at the end of the day, if you know what you’re looking for from the beginning before you start these conversations up, it’s going to make the whole process a lot less stressful.  
Radon :All right, everyone that wraps up our episode today. If you’ve not had a chance go to the website, pomwealth.net/blog. On that blog, there’s a great wealth of information there. If you’d like to set up a complimentary no obligation 15 minute introduction call with Murs and I, you can see it right at the top right hand corner of the website, you’ll see our calendar and you can be able to get on our calendar. We hope this has been beneficial. We’ll talk to you again next week.