We conclude our celebration of FED-uary with an article on how to tell if your financial advisor is a good fit for your financial situation.
It is the final week Fed-uary! We are so thankful for our federal employee community. Your work is vital to the country and we appreciate all you do. Today’s article is the last in the month-long series designed to help you understand the benefits of working with a fed-focused financial advisor, how to choose an advisor, and how we at STWS help our feds with the fourth leg of the retirement stool – strategy. As promised, today’s article will help you determine if your financial advisor is worth the price of admission.
In week 3 of this series, we examined the credentials that feds should be looking for in a financial advisor, but this is only part of the story. Just because an advisor has credentials does not mean they will be a good advisor for you. Following are a few key traits that feds have shared with me that they value in an advisor.
1. Honesty
People hire advisors to help them make their best financial decisions. A good advisor must be honest with their clients. For example, if a client wants to retire on a certain date, perhaps at their Minimum Retirement Age (MRA), but has not saved enough to do so, a good advisor will say so. In addition, the advisor should offer specific advice as to how the client can reach their goals. Usually, this is either by saving more, working longer, or living on less.
2. Helping to Clearly Define and Prioritize Goals.
Often times, there is a vagueness about long-term goals. We all want to retire and live a comfortable life, but what does this mean to a federal employee? There are many factors, and eligibility for an immediate pension with benefits is one of the most important that an advisor should be aware of. But what about the ability to confidently say that you are prepared financially for whatever life throws at you, for the rest of your life? This may be very different from simply becoming eligible for retirement.
3. Experience and Knowledge Matters!
Ensuring your advisor has the right credentials is the first step in hiring an advisor, but what is impossible to understate is the value of experience and knowledge. There’s a myriad of financial circumstances, situations, and decisions that can occur in life. Having a financial partner who has experience and knowledge in something you may have never thought of can be the difference between success and failure. For example, many feds think that contributing the minimum amount (5%) to get the full match in their TSP is sufficient for building a retirement nest egg that will keep them secure in retirement. For many feds, this is usually not true. Further, turning your TSP from a savings account into retirement income, designed to last for life, is not simple. A good advisor will make sure you do not fall for these costly, and sometimes devastating, mistakes.
4. Trust Above All.
A good financial advisor is one you can trust completely. As with any relationship, building trust takes time. However, from the start, you should feel your advisor is looking out for your best interests. There is a layer of confidence with the Fiduciary standard, but you should also feel in your gut that the advisor is sincere in their words and actions.
Our mission at STWS is to Reach, Teach, and Serve the federal community. For some federal employees, the opportunity to attend our webinars to become educated on the basics of the federal benefits package is all that is needed. For some, the ability to meet with one of our advisors as part of the Part 2 Personalized Education process is enough. For those who are looking for a financial partner to walk side-by-side with throughout the financial lifecycle, it is important to understand how to choose that partner, and what differentiates an average advisor from a good one. My hope is that this month-long series serves as a guide to the benefits and process.
As always, please contact us with questions. We are here to help!
**Written by Jennifer Meyer, Financial Planner. The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Jennifer Meyer and not necessarily those of RJFS or Raymond James. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy suggested. Every investor’s situation is unique and you should consider your investment goals, risk tolerance, and time horizon before making any investment or financial decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. **
Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.
