You've worked hard and saved money for retirement. The last thing you need is to lose the money in a volatile stock market or with an investment professional that may not understand your unique situation. You need someone who understands the market and will work with you to create a plan that reaches your financial goals.
Don't hire the first person who is recommended to you.
Take time to interview several financial professionals before making a decision of who will invest your money. Below are seven questions you should consider asking them. If anyone can't (or won't) answer questions to your satisfaction, he or she may not be the best match.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
1. Can I ask you a few questions?
Seems ridiculous to ask this question, but if they're not open to talking to you about how they operate their business, their training and background or investment style, they may not be open to answering questions about how your money is invested. It might be better to find someone else who is willing to answer your questions.
2. What's your investment philosophy?
You're investing your future with this company and person, so it's important you can talk to them in terms you both understand. If they put money in what seem like complicated investments, you will likely have an uphill battle to decipher the basic elements of your account. It's better to have someone who has a similar philosophy to your own and can explain what they're doing in a way that makes you comfortable.
3. Are you fully licensed?
If they're only licensed for insurance, it's likely they will only recommend insurance products in a financial plan. While that may make sense for your portfolio, it may not be the best option. When a financial adviser is fully licensed it means they have securities and insurance licenses and are required to have ongoing training. For example, I am fully licensed, which means I have Series 7 and 66 and am allowed to sell nearly any investment. I also have a life insurance license, which allows me to sell life, long-term care and annuities.
4. What kind of continuing education do you practice?
It's important to be constantly learning, especially in this field that can change with the stock and bond markets as well as the law. As a fully licensed professional, I have the Accredited Asset Management Specialist (AAMS) designation, which requires that I have tenure in the industry, additional continuing education and subscribe to a code of ethics.
5. How do you get paid?
The financial industry does a good job of confusing people about how we get paid but that is not our intention. In fact, if you're confused at the answer you get to this question, that person may not be right for you. As a fully licensed financial adviser, I typically get paid in one of three ways, depending on the services I provide to the client: via a commission for the products I sell, a money management fee as a percent of assets under management or a financial planning fee for creating a plan you will execute.
6. How do you invest in yourself?
It's my belief and practice that I have to take time for myself and my family so that I can best serve my clients. If I am always working, it can feel like I can hardly breathe, and I am not enjoying my work. Taking breaks and vacations helps reset and renew so that I can truly focus on what I love—helping my clients reach their financial goals.
7. Why did you become a financial professional?
The answer to this question tells you how passionate they are about their work and connects you to them in a personal way. I became a financial professional to help women understand money and investments in a way that wasn't available when I was growing up. I want you to have education about what's right for your personal financial future. That truly matters to me.
When I sit down with prospective clients, I want to get to know them and I want them to know me. Whether you work with me or someone else, it's important that you are comfortable and understand what's happening with your investments. You've worked hard and your money should work for you in ways that make sense for your financial goals. Don't be afraid to ask questions before hiring a financial professional.
Shanna Tingom is the co-founder of Heritage Financial Strategies. Her specialty is working with female entrepreneurs, business leaders and individuals experiencing life transitions.
Shanna Tingom is a Registered Representative, securities offered through Cambridge Investment Research, Inc., a broker-dealer, member FINRA/SIPC., Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Adviser.
Cambridge and Heritage Financial Strategies are not affiliated.
-
Bullish, Deere and dLocal: Thursday's Biggest MoversBLSH stock is continuing its post-IPO climb, while Deere and dLocal are swinging post-earnings.
-
Another State Eliminates Capital Gains Tax in 2025: What’s Next?Capital Gains Could a major tax shift in one state be an example for other states to follow?
-
Asset-Rich But Cash-Poor? A Wealth Adviser's Guide to Helping Solve the Liquidity Crunch for Affluent FamiliesMany high-net-worth families experience financial stress because of a lack of immediate access to their assets. Liquidity planning aims to bridge the gap between long-term goals and short-term needs and avoid financial pitfalls.
-
Social Security Planning Strategies and Challenges as It Hits Its 90th Year: A Financial Adviser's GuideLonger life expectancies and changing demographics put extra pressure on the program, making it crucial for future retirees to understand its evolution, common myths and how to strategically plan for their benefits.
-
How to Build Your Financial Legacy Three Piggy Banks at a TimeA wealth adviser shares a childhood saving technique that taught him lessons of stewardship, generosity and responsibility and helped him answer the question we all need to answer to define our lives by impact rather than greed: 'What is this all for?'
-
Which of These Four Withdrawal Strategies Is Right for You?Your retirement savings may need to last 30 years or more, so don't pick a withdrawal strategy without considering all the options. Here are four to explore.
-
DST Exit Strategies: An Expert Guide to What Happens When the Trust SellsUnderstanding the endgame: How Delaware statutory trust dispositions work, what investors can expect and why the exit is probably more important than the entrance.
-
Think Selling Your Home 'As Is' Means You'll Have No Worries? Think AgainThere are significant risks and legal obligations involved in selling a home 'as is' and by yourself, without a real estate agent.
-
What the OBBB Means for Social Security Taxes and Your Retirement: A Wealth Adviser's GuideFor Americans in lower- and middle-income tax brackets, the enhanced deduction for older people reduces taxable income, shielding most of their Social Security benefits from being taxed.
-
Financial Planner vs Investment Manager: Who's the Better Value for You?When markets are shaky, who do you trust with your money? A recent study provides useful insights into the value that different financial professionals offer.
