Keep these things in mind when you’re looking for a financial adviser
by Alina Tugend
October 8, 2016
“When my family moved to New York from London in 2000, we had two small children and were buying a house in the U.S. for the first time. We needed some financial advice.
A friend recommended her investment adviser, who at the time worked at a big bank. We hit it off, and we soon decided to put him in charge of managing our retirement savings.
I’ve been mostly satisfied with our choice, but now I realize it was more luck than skill. At the time, I had no idea what questions to ask to make sure this adviser would really handle our money responsibly.
So if you’re thinking about hiring someone to help you plan your retirement or improve your personal finances, here’s what I’ve learned in the past 16 years.
First, some definitions of what can be overwhelming jargon: Financial adviser and financial planner are generic terms, often used interchangeably. But certified financial planner (CFP) refers to someone who has passed exams on topics like taxes and retirement planning and is required to adhere to an ethical code. Meanwhile, a registered investment adviser (RIA) describes someone (or a firm) regulated by government securities agencies who gives advice about stocks, bonds and mutual funds. Many such consultants are both RIAs and CFPs.
Second, the most important word you need to know when looking for financial help is fiduciary. That means the person you hire must put your interests before her own, instead of recommending investments that might increase her fees at your expense.”
On April 10, (2017), the Department of Labor, the federal agency that oversees retirement plans, will put into effect its fiduciary regulation.
Starting on that date, broker dealers and financial advisers will be required to provide advice that is in their clients’ best interest.