Questions to Ask Your Financial Adviser Before You Retire
Here are a few questions to get you started. You'll find more on pages 279 through 286 of my book, "The AARP Retirement Survival Guide."
1. Tell me what you see as my objectives, experience, and risk tolerance in light of my impending retirement? You are looking for clues that your adviser realizes that you are moving into retirement and that you will need to support yourself for a lifetime, even as your expenses can be expected to rise due to inflation. 2. How would you propose to meet my objectives? Can the adviser articulate a reasoned strategy for meeting your objectives?
3. Tell me about your experience with clients in circumstances similar to mine. Look for an adviser with clients whose ages, assets, situations, and needs similar to yours.An adviser whose practice is built around hundreds or thousands of smaller accounts will have a different focus than an adviser who specializes in clients with larger portfolios. Likewise, an adviser who helps younger investors grow their assets may not know how to create lifelong income for retirees.
4. How do you assess your performance for these clients? How does the adviser measure his success in fulfilling income needs for his clients? How does he monitor performance? What measures does he use? How does he convey this information to you?
5. Do you see our relationship changing after I retire? If the adviser says "no," think about whether you need a different type of adviser. After retirement, you need to work with someone who can manage and monitor your portfolio to make sure that your income needs are met even as your expenses rise over the years due to the loss of purchasing power. Some advisers don't manage portfolios -- they give stock or bond recommendations to their clients, leaving the job of portfolio management to the client.
These added responsibilities differ from the typical growth oriented adviser relationship and need to be addressed well before you retire. Retirement is one of those life events that triggers the need to reassess your situation and to graduate to advisers who concentrate on creating retirement income for their clients.
Julie Jason, Jackson, Grant Investment Advisers, Inc., 2 High Ridge Park, Stamford, CT 06905 Tel: 203-322-1198 Copyright Julie Jason 2009. All Rights Reserved. www.jacksongrant.us