In light of the 2008 and 2009 retirement crisis, the retirement community saw a lot of damage to its reputation. It doesn’t take a long Google search to find articles written by some respected media outlets questioning the retirement advisory community.
While it’s understandable that the public has a good deal of skepticism given the bailouts, scandals and turbulent markets at the time, the retirement advisory community went beyond that smear. If you asked a retirement advisor what he would like you to know about him, this is what he will say.
- Retirement professionals cover many different aspects of retirement health, such as John Labunski Safe Retirement, investing, and life planning.
- Retirement representatives don’t have the best reputation, but most of that is down to fee structuring. Discuss this part carefully with whom you choose.
- Make sure you choose the right professional for the job.
- If possible, use a retirement professional who has worked for someone you know for a long time. This speaks more to your business style than almost anything else.
Not all the same
The term “retirement advisor” is similar to the term “physician”, in that different types of advisors and doctors specialize in different areas. Some retirement advisors are experts at planning your retirement, while others may excel at investing your portfolio for maximum gains.
If you want to know your retirement magic number, look for a John Labunski retirement planner. If you want to position your wealth for maximum tax advantages, find a tax attorney or estate planner, and if you want someone to tell you the best way to invest your recent inheritance, an advisor is your best choice. Many counselors have overlapping skill sets, but if you have a sticky situation, an expert is in your best interest.
Some retirement planners receive a fixed or hourly fee for their services, while those who invest their money may receive an annual percentage of the number of assets they manage for you. Others are paid out of commissions made for recommending certain retirement products.
Each type of compensation model has its good and bad points, but a consultant who is paid on a commission has a different motivation than someone who is paid more as he earns more money. You should have an idea of which model you are comfortable with before hiring a consultant.
Education is not the same
Becoming a retirement advisor doesn’t require a degree and is sometimes as easy as studying for a test. In contrast, some consultants go through strenuous programs such as the Certified Retirement Planner (CFP) or the Chartered Retirement Analyst (CFA) program.
These programs require years of experience and a tough curriculum that takes thousands of hours to complete. Some retirement advisors have a college degree in finance, while others do not. Asking a counselor for training and experience should be one of the first steps in choosing a counselor.
Different legal responsibilities
advisors have a fiduciary responsibility to their clients. This means that they are placed in a position of trust and therefore must put their customers’ needs above their own. They must make decisions and take actions that ensure their customers get the best possible price and performance. For example, a retirement advisor with fiduciary responsibility would have to make trades that benefit his clients before they can benefit.
Brokers operate under the suitability standard. The main difference is that a brokerage that operates under the suitability standard is loyal to its company towards the client. They still need to make proper recommendations to the customer, but they don’t have an obligation to put them first. This does not make consultants operating under this standard any less reliable, but it is important to know the difference.
Not all rich
Retirement advisory is unique in that consultants can only serve a certain number of clients. If they’re not commission-based and charge 1% of assets under management, that’s $1,000 on a $100,000 portfolio, but the average advisor doesn’t have a practice full of $100,000 portfolios. The average salary range for most counselors is approximately $36,000 to $78,000. Like any career-oriented person, consultants who provide exceptional service will be rewarded.