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Monday, November 7, 2011

Searching for a Financial Advisor

Mike and I have always had a very simple 'couple's financial plan' - pay off the student debt asap while still squirreling away some savings.

It hit me pretty quickly when my work place's financial rep for retirement plans came that we need to develop a more serious financial plan sooner rather than later. The overall goal remains the same but I think it's time to make it a little more complicated and formulate some real, tangible goals. So naturally I talked to my sister about it - she is totally obsessed with financial planning these days so I knew she'd have some resources. Here are some things I'm thinking about now that I'm on the prowl for a financial adviser:

1. Creating an actual, numerical, goal for retirement - putting a dollar amount on what I want out of retirement will make it more likely that I will actually achieve it.
A report by HSBC said, Americans with a financial plan have accumulated on average $127,000 in retirement savings vs. $56,000 for the average U.S. household. Non-planners have an average of around $23,000 saved.
Almost 44% of those without a plan associate retirement with financial hardship, while this number is only 19% for those with a plan.

2. I've got a lot of questions to ask because anyone can become a financial planner and some of them just want to sell me stuff. Here's a GREAT read about the top 10 questions you should ask when interviewing financial planners. They include: 
  • How are you compensated? 
  • How do you communicate with clients and what can we receive from you? 
  • Do you have experience working with clients similar to me? 
  • Who will I be dealing with? 
  • What credentials do you hold? 
Interviewing financial planners seems daunting but I know it's a smart choice for us because we have a lot of questions. Should we be investing money on our own or putting a lot into our 403b? What percent of our income should we put towards debt v. savings? If we want to buy a house, what's a reasonable mortgage?

Got any tips for the search?  

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