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Work With a Professional Financial Planner to Boost Your Investing Confidence
Creating a long-term financial plan, picking investments and trying to achieve retirement goals while managing risk may feel like a daunting proposition. Seeking some professional guidance can help make the process easier.
- People who work with a financial professional tend to feel more confident in their financial future.
- Financial advisors have different types of qualifications and not all advisors can offer every type of investment product.
- Your relationship with an advisor is like your relationship with your doctor—you want someone who shares your life values and who you can trust.
You’re dedicated to helping students master certain subjects. But unless you teach a course in financial management and investing strategies, you probably don’t have the expertise or feel confident enough to design and manage a comprehensive financial plan on your own.
A recent study conducted by ING Retirement Research Institute found that people who work with a financial professional reported feeling 60 percent more confident in their financial future.* With a pro taking care of the technical stuff, you can focus on your career, your family and your goals.
Find the right advisor by asking the right questions
Below, we offer some tips on how to find financial advisors in your area. Once you’ve compiled a few candidates, it’s time to sit down and interview them. You’re looking for a person with the experience and qualifications you need, but also someone who has similar ethical values. Here are a few questions to ask:
- How long have you been an advisor? Many years of experience means she’s been through market ups and downs and has managed through recessions and growth economies to understand which strategies work and which don’t.
- Which certifications do you have? There’s a veritable alphabet soup of credentials advisors can append to their names. Learn more about them here.
- What services do you offer? You want to know what types of investments the advisor can sell, and whether they develop comprehensive financial plans, specialize in retirement planning or just advise on investment portfolio allocations.
- How are you paid? “Fee-only” advisors charge by the hour or as a percentage of assets under management. “Commission” advisors get paid for specific products they recommend. “Fee-based” advisors may charge a fee and get commissions on some products.
- What’s your investment philosophy? Understand how he approaches risk in up and down markets. See if he also factors in non-financial aspects of your life like social and cultural preferences. Get a sense of his ethics and integrity.
- Will you put our agreement in writing? You want an advisor who will spell out all services, expenses and working arrangements.
The bottom line
Do thorough research before hiring a financial planner. This is a very personal as well as professional decision, so you want to feel comfortable with your choice. Here are a few resources and tips:
- Search the National Association of Personal Financial Advisors for a fee-only advisor in your area or visit the Financial Planning Association to find a commission-based advisor.
- Ask respected friends and colleagues for recommendations.
- Learn more about financial planner certifications, ethics and standards at the Certified Financial Planner Board of Standards.
- Educate yourself about investing basics so you can ask smart questions and keep tabs on what your advisor is doing with your money.
*2011 participant survey conducted by ING Retirement Research Institute
Plan your strategy:
Educator pensions and Social Security might come up short. Find out why your benefits may fall short and what you can do about it.
Working with a financial planner. Read tips on how to find and evaluate a financial advisor.
Why women need to close the retirement savings gap. This article offers ways you can become a more confident saver and investor.
Savings options beyond your 403(b) plan. Explore a variety of options beyond your 403(b) that may help you achieve different goals.