In retirement saving, as with many other forms of long term financial planning, understanding and mapping out what portion of your financial profile will be devoted to your savings is crucial. Although different savers have different needs and different levels of understanding of how this long-term planning should go, it’s always useful to enlist the aid of a financial advisor (or, as it pertains to retirement savings, a retirement advisor), who can provide individualized guidance and input on how this process should go. Selecting an advisor who will fulfill your needs and help you meet your retirement goals can help you make a big step towards your future, so considering your circumstances and the services offered by the retirement advisor is imperative.   

What is a Retirement Advisor? 

A retirement advisor is the same as a financial advisor, financial planner, CFP, or anyone else who provides financial advice. Beyond the name, what is more important is where the advisor works, the advisor's certifications, if they are a fiduciary, and if the advisor has the expertise in the area of concern for the client. Regardless of their title, an advisor/planner working at an insurance company focuses solely on selling insurance; if there is any retirement planning, it also revolves around the sale of an insurance product. An advisor/planner working for a large bank or brokerage firm will focus on selling proprietary funds/investments to the client and providing loans through the banking arm. 

Do I Need a Retirement Advisor?

A person should hire a financial advisor based on their own circumstances. Some common reasons are because the client wants to know: how much they should save each month and in which account for retirement; if their portfolio is adequately diversified; if they have sufficient insurance coverage; is their estate plan commensurate with their wishes; if they should buy/lease a car; can they afford to buy another piece of real estate; how to manage student loans; should they refinance their house; and more.

How Can I Select a Qualified Advisor? 

The first step in finding a financial advisor is limiting your search to CFPs who are Fee-Only advisors who do not sell any products or work on commissions. Next, ask yourself why are you seeking a financial advisor and find someone that has that focus. For example, are you looking for someone to do just a one-off plan for you? Do you need someone to manage a portfolio and provide ongoing financial guidance while you focus on your career? Do you want someone with expertise in taxes? Do you have stock options you need to have reviewed? It is important to find someone who has expertise in the area(s) that are the most concern for you. For example, the general public is very familiar with a CPA, but not all CPAs are suitable for everyone. A small retail business owner would seek a CPA who understands his/her industry versus a CPA that works primarily with non-profits. Once you have narrowed it down, check out their reviews online, if any and ask for references.

Managing Expectations 

Have reasonable expectations. If an "advisor" says they have an investment that provides a 10% return with no risk, when U.S. Treasuries are yielding 2%, be very skeptical. If something sounds too good to be true, then it probably is. Also, don't assume a financial advisor is going to create miracles or offer you a hidden investment that no one knows about. 

Working With Your Retirement Advisor 

Communicate with the advisor early on. Let them know if you want to meet quarterly to go over your investments. Ask them what the process is. Ask them if they will review all of your financial picture or just one specific area. Make sure they are a fiduciary. 

As you select, plan, and work with your retirement advisor like ACap, remember to consider their abilities and how they can address your specific needs. Whether you’re interested in investments as part of your retirement planning or you’re seeking management for your financial profile, understanding the abilities and services provided by your advisor will allow you to make the most educated selection and understand the retirement saving process as it unfolds.

Ara Oghoorian, CFA, CFP®, CPA is the President & Founder of ACap. ACap Advisors & Accountants is a “Fee-Only” wealth management and full-service accounting firm, specializing in helping doctors and healthcare professionals make sound financial decisions.

Contact ACap at info@acapam.com or 818-272-8511.