Saving for your retirement is an important component of wise financial planning, but it requires financial expertise that you probably don’t have. When you’re looking for a financial advisor to help you put together your retirement plan, consider your option carefully. You want to make sure you hire someone that will have your best interests in mind.
Advantages of Financial Advisory Services
Planning for long-term finances is difficult, but you want your retirement to be as well-planned as possible. Financial planners help you find how you can best prepare for your future retirement. They know the ins and outs of investing and taxes, and can help you decide where to put your money. When you receive a service, there are no binding contracts with further obligations of fees and compensation. Of course, you can discontinue your services any time if the advice, management of assets, and planning implementation don’t meet your expectations.
NAPFA Standards for a Financial Advisors
When you’re searching for a financial planner, they must follow the guidance of the National Association of Personal Financial Advisors (NAPFA). NAPFA is a professional association of registered advisors with the fiduciary responsibilities of acting in the best interest of the clients. Under NAPFA’s fiduciary oath, members of the organization cannot receive any compensation from another party to refer clients and businesses. This is against the rules because it would cause conflicts of interest which can be costly to the client.
Types of Financial Advisors
Before selecting a reputable financial adviser, look carefully at how the financial advisory firm charges for services. NAPFA requires the payment of compensation paid using fee-only, commission and fee, or commission-based payment models. Each of these compensation-types has different pros and cons, so consider your priorities carefully. Of all the compensation types, fee-only is the most transparent and objective model to minimize conflicts and risks for your financial future. A fee-only financial planner works with clients without the involvement of other parties to avoid any conflicts that affect the client. If you need assistance planning for your retirement, contact a registered firm so that you can retire comfortably.
Remember to do your research and ensure the financial advisor is working within the fee-only structure without commission fees. Your fiduciary should act on your behalf and in your best interest. The compensation will always be a flat retainer fee, an hourly rate, or a specific charge for financial planning services.
Author Info: Anita Ginsburg is a freelance writer from Denver, CO. She studied at Colorado State University and now writes articles about business, health, home improvement, and family. A mother of two, she enjoys traveling with her family whenever she isn’t writing.
