It’s no secret that many Americans ignore retirement planning and often retire with a smaller nest-egg than they would like.
In fact, A Northwestern Mutual study on American adults' financial attitudes and behaviors unveiled that 71% believe their financial planning could be better, and a mere 29% actually engage with a financial advisor. If you fall into either of these categories and are ready to take a few simple steps to ensure a more comfortable retirement, you've come to the right place.
Read on to learn what you need to know before hiring a financial advisor.
Get a Financial Advisor ASAP
Studies show that individuals who use a financial advisor can end up with 15% more income in retirement. That equates to an additional $75,000 on a $500,000 total or $150,000 extra to spend on a one million dollar nest-egg!
While hiring a financial advisor can help you maximize your retirement savings and investments, there are some potential pitfalls you should be aware of before you choose who to hire.
Avoid Non-Fiduciary Financial Advisors: Choose a fiduciary financial advisor who is bound to act in your best interest, steer clear of conflicts, and disclose potential conflicts and all relevant facts. If you’re currently heeding the advice of a non-fiduciary advisor, use SmartAsset’s free tool to find a fiduciary who operates with your future in mind.
Don't Rush Your Decision: Take your time. Even if an advisor is conveniently located, ensure they are the right choice for your financial future.
Ensure Your Strategies Align: Opt for an advisor whose risk tolerance resonates with or is adaptable to yours, whether they prefer aggressive stock investments or secure bonds.
Inquire About Credentials: Ascertain your prospective advisor's qualifications, including passed tests, licenses, and credentials such as the Series 7, and Series 66 or Series 65. Consider advisors with additional credentials like Certified Financial Planner (CFP).
Understand the Fee Structure: Be aware of fee structures. Exorbitant fees can diminish your returns. Assess whether the advisor charges a flat rate, a percentage of managed assets, or earns commissions from financial products, which could pose a conflict of interest.
Choose a Vetted Advisor: We recommend using SmartAsset’s no-cost matching tool to find vetted fiduciary advisors in your vicinity. Just complete their simple retirement quiz, and you’ll be matched with up to three financial advisors. SmartAsset only works with fiduciary advisors and their tool is completely free with no hidden costs or obligation.
Click Your State to Get Matched With Financial Advisors Who Serve Your Area
After you choose your state and answer a few questions, you can compare up to three advisors that serve your area and decide which to work with.
