How well do you know your financial advisor?
Suddenly one day you may wake up and realize, that although your mind tells you that you are still eighteen, you are actually fifty-plus years old and staring retirement squarely in the face! That face has many people telling you they are “retirement specialists” or “senior experts.” It is interesting how many of us will not trust a family member with our money but we will sit across the desk from someone we hardly know and suddenly trust them to handle our retirement, only because they have a fancy title or some initials after his name on his business card.
What do all those initials mean and how do you know those initials make that “senior expert” qualified to manage your money? How do we know the professional designation is still valid? A great place to start is the FINRA Professional Designations list. Interestingly enough, according to www.finra.org, “Many state securities and insurance regulators do not allow financial professionals to use a designation-in particular a “senior” designation-unless it has been accredited by either the American National Standards Institute or the National Commission for Certifying Agencies.” Suddenly the list is reduced to six acronyms they can be found below or online.
Designations accredited by the American National Standards Institute:
Designations accredited by the National Commission for Certifying Agencies:
- Certified Financial Planner - CFP
- Certified Medicaid Planner - CMP
- Certified Retirement Counselor - CRC
- Certified Retirement Financial Advisor - CRFA
- Certified Senior Advisor - CSA
Now that you have checked out the initials, how do you know if your “senior expert” is acting in your best interest? Working with a financial advisor is a very personal relationship. Over time, you must build an extreme level of trust and confidentiality with them. Has your advisor searched out additional guidance when they did not have the knowledge base to assist you? If so, they are acting in your best interest. Has your advisor been fully transparent with you? Do you know how they are being paid and what fees you are being charged? And, are any potential conflicts of interest presented to you in writing? If so, they are acting in your best interest. Your relationship with your advisor will be built on trust, and if you cannot trust them then they should not be your advisor.
What happens if you discover your financial advisor is being unethical? Do you have the right to file a complaint? The quick answer is YES. You can do so by following the steps laid out in FINRA’s Investor Complaint Program brochure. You can also look up your advisor and check their complaint history prior to investing with them. Integrity, confidentiality and trust are the makings of a good financial advisor. If you feel the person you’re sitting across the table from, talking about your retirement goals is lacking in one of these three areas then they may not be the right person to handle your money. “Retire from work, but not from life” M.K. Soni.
For additional tips and information on filing advisor complaints visit FINRA.
Michigan State University Extension offers financial management and homeownership education classes. For more information of classes in your area, visit the MSU Extension website. And if you are wondering about your financial health, take a financial health survey from MI Money Health to get your financial health score. It is confidential and your answers never connect back to your name. This survey can help you evaluate your current financial situation, provide ideas on how you may improve your financial health and connect you to resources in your local community.