How to Select the Perfect Financial and Investment Advisor

By Daniella Rand

As you begin your search for a financial and investment advisor for the long term, take a moment to review the most important steps in the process of finding and choosing such a person (or team).

This is a decision that, ideally, you should only have to make once in your life. There is no sense in rushing it.

Fortunately, technology has streamlined the process of finding a financial advisor. We’re no longer limited by geography; many people work with financial advisors in other states, even other time zones. Performance and service are all that matters.

That doesn’t make the choice any easier, of course. Here’s how to select the perfect financial and investment advisor from a crowded field.

Daniella Rand

Evaluate Their Track Record Through Multiple Market Cycles

Begin by evaluating each candidate’s track record through multiple market cycles. Ask the following questions of yourself as you pore over their performance:

  • How do assets under their management perform when the market goes up?
  • How do assets under their management perform when the market goes down?
  • Do assets under their management consistently outperform the market?
  • Do they employ strategies to reduce downside risk and preserve buying opportunities during bear markets?
  • Do they constantly perform due diligence on funds and fund managers to ensure that their portfolios are as strong as they can be?

Understand How Much They Charge

Seek transparency in advisory and management fees. Don’t be afraid to ask directly how much the advisor charges. The answer may be more complicated than you would like, but the advisor should have no trouble providing a clear explanation of their advisory fees, at the very least.

Understand What You Get For Your Money

Work to uncover each advisor’s true value. How much are you getting for your advisory fees? Some hands-off investment managers do relatively little for their clients, other than periodically rebalance portfolios and take basic steps to implement an agreed-upon financial plan. You are entitled to a higher level of service.

Confirm That They’re Sworn to Act in Your Financial Interests

The best investment management professionals are fiduciaries. They are sworn to act in their clients’ financial interests, an imperative reflected in every decision that they make. As with your advisor’s value, you are entitled to this promise. Fortunately, fiduciary advisors are quite easy to find in the current environment.

Understand Their Investing Approach and Process

This is, perhaps, the most important step in the process. If you are not comfortable with an advisor’s investing philosophy and process, you should not allow them to manage your money. 

Ask for References

Any advisor seeking your business should have no qualms about providing client references. These individuals and families must be willing to provide unbiased feedback about the advisor’s performance. Even if their reviews are uniformly positive, they may shed additional light on the advisor’s approach in a way that helps you make a decision.

Finding the Perfect Fit 

Financial advisors are as diverse as the clients they serve. It is no exaggeration to say that, regardless of your investing objectives and tolerance for risk, the perfect advisor fit is out there, waiting for you to uncover them. Why wait another day to make the connection?

How to Plan For Your Retirement

By Daniella Rand

Preparing for retirement is a long, deliberate process. It is not something you can start and finish in the course of a weekend, or even a week off. Moreover, it is best done in consultation with a seasoned financial professional — unless you happen to be a seasoned financial professional yourself, in which case you have little reason to continue reading.

Let us assume that you have made little headway in your efforts to plan for retirement thus far. How can you get the process back on track?

These 10 steps will guide you. They are not the last word on retirement planning, but they will certainly set you down the right path.

Daniella Rand

1. Articulate Your Goals and Objectives

Articulate and prioritize your top investing goals and objectives. These will include objectives related to retirement, such as lifestyle choices and purchases you wish to make, as well as nearer-term objectives like funding your kids’ college education.

2. Assess Your Risk Tolerance

Take a risk tolerance questionnaire to determine the appropriate mix of investing instruments and asset allocations to include in your portfolio. Your tolerance will change as you age, so you will need to repeat this step more than once.

3. Find a Seasoned Financial Advisor

Arguably, you should do this before steps one and two, as a competent financial advisor should happily help you assess tolerance for risk and prioritize investing goals. But you should definitely get it done before proceeding any further.

4. Join Employer-Sponsored Retirement Plans

Take advantage of any retirement plans offered by your employer, such as a 401(k) plan. Your contributions may be tax-deductible on your state and federal returns.

5. Maximize Your IRA Contributions

Maximize your IRA contributions, which may also be tax-deductible. Consult current IRS guidance for this year’s limits.

6. Pursue Additional Tax Minimization Priorities

Talk to your financial advisor and tax professional about other strategies to minimize your tax obligations and retain more of your hard-earned money. You may be leaving cash on the table.

7. Obtain Life Insurance

Protect your heirs with a life insurance policy adequate to replace your income and cover your debts should you pass away prematurely.

8. Get a Disability Insurance Policy

Disability insurance is another important layer of financial protection that activates if you become unable to work for a long period of time.

9. Make an Estate Plan

Get your affairs in order. Work with your financial advisor to find an estate planning attorney and draw up the necessary directives.

10. Focus on Your Career

Lastly, remember to keep things in perspective. As long as you continue to work, you will continue to earn. You will put some of those earnings to work in the market, where they’ll grow until you retire (and beyond). Anything you can do to maximize your earning potential during this period is welcome.

Retirement Is Right Around the Corner

Retirement is approaching faster than you realize. Even if you are closer to the beginning of your career than the end, you know that time comes for us all. 

It is therefore in your best interest, and that of your family, to act with deliberate haste in developing and implementing a complete retirement plan. With the above, you have your marching orders. Time to follow through.