5 Tips for Choosing the Right Financial Professional

Source: iStock

Source: iStock

If you’ve decided to seek help from a financial professional, you may not know where to start or be overwhelmed by all of the options. While you may be tempted to give up and go to your friends and family for advice, your best bet is to get help from someone with experience, especially when it comes to saving for educational costs or retirement planning. The right advice can help you reach your financial goals and improve your financial health. We spoke with Cathy McCabe, senior managing director for TIAA-CREF’s institutional business division, for advice on choosing a financial professional. Here are five of her tips.


1. Use your employer as a resource

Check to see if your employer offers assistance with finding a financial professional. Your human resources department may be able to point you in the right direction.

“Increasingly, this is a benefit offered by companies in conjunction with their fiduciary responsibilities as a retirement plan sponsor. Also look for a financial adviser who is FINRA licensed. TIAA-CREF’s advisers are required to have Series 7 and 63 licenses. Life, heath and/or variable annuity licenses are a bonus. FINRA ensures they are regulated, and you also want them to be able to look at your financial life long-term and holistically,” McCabe said.


2. Shop around

Don’t stop at the first person you find. It will be important to weigh your options so that you can find the best fit for your financial goals. McCabe says this is a decision that should not be taken lightly.

“By weighing your options, you’ll be able to find a professional who will provide you with quality advice that keeps your best interests top of mind. Advice shouldn’t be a one-time event – therefore, you need to make sure you choose an advisor with whom you can have a healthy, ongoing relationship. A skilled advisor can help individuals navigate major financial challenges over the years, such as marriage, divorce, purchasing your first home, or adopting a child.”

3. Inquire about payment structure

Source: iStock

Source: iStock

McCabe says it’s important to ask how the advisor is compensated. You should do this during your first informational meeting. She says some charge flat fees and others are commission-based.

“Having a solid understanding of all costs before you proceed will minimize any surprises down the road,” McCabe said. “Also, always make sure you read the code of ethics that your financial planner adheres to. Look for the word “fiduciary” and language that requires planners to look after your best interests. “


4. Research expertise

If you are looking for a financial planner, or a similar financial professional, make sure he or she is properly certified. A directory of certified financial planners can be found on the Certified Financial Planner Board of Standards website.

“Naturally, knowledge is key. Advisors should have a keen understanding of the industry as well as extensive knowledge their company’s products and services,” said McCabe.


5. Choose a professional who pays attention

Once you do find someone you feel comfortable working with, make sure that your goals and needs are being taken into account. You should feel that the financial professional is listening to you. A simple head nod and generic financial advice isn’t enough. McCabe says you should be receiving advice that is tailored just for you and your unique financial situation:

“A good financial advisor needs to be a good listener and willing to offer personalized advice and guidance. Doing so provides the foundation for a strong relationship between advisor and client. At TIAA-CREF, we customize the advice we give based on our clients’ needs, situation, and hopes for the future. We want to work together with clients to develop a successful financial plan – regardless if they are experienced investors or beginners who need tips and advice on navigating the complicated world of financial services.”

Go here for part one of this discussion.

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