April is Social Security Awareness month as well as Financial Literacy Month.
The need for financial literacy does not end when you cross over the “retirement” line. In fact, it becomes imperative that you look at income planning as the foundation of building the life you want past that point.
You have “rights” as you work with financial professionals.
When you retire, your “accumulation” phase shifts into the “distribution” season. You want to have a different conversation with an advisor. An advisor’s job, especially at this stage of life, should be to help you banish fear, savor hope, and avoid regret in life.
It is more than just rebalancing your portfolio and mitigating risk. Creating a vision of what is important to you and gaining peace of mind that you have the financial means to sustain you moving forward would be your objectives.
When engaging a financial life planner or advisor, you have the right to:
Feel at Ease, Accepted, and Heard
You want to communicate freely and honestly, to be understood, and to understand. You should ask for clarification where needed and not feel “talked over.”
Have Your Life, Objectives, and Concerns Treated with Respect
Everyone is unique and there should be no judgments made by the advisor. You should feel respected, no matter your financial situation and goals.
Confidentiality with Regards to All Information You Provide
Every part of your personal life needs to be protected. Your finances are an intimate territory and your advisor should never disclose your information to third parties.
Full Disclosure by the Advisor as to How They Are Compensated
If you are working with a Registered Investment Advisor, you should receive a copy of the advisor’s ADV Part II – which is a document required by the SEC that outlines how their business is run. It will include a code of ethics and privacy statement.
What services are included in their asset management agreement? What is included in creating a financial plan, and what is the cost? How comprehensive is the planning process? What is the time frame for completion of the plan as well as follow-up implementation?
Know the Terms of Your Working Relationship
Have a contract drafted describing the terms of your working relationship. Both you and your advisor should be able to discontinue the relationship if it is found to be inappropriate or unsatisfactory.
Written Recommendations That Are Based on Your Individualized Priorities and Perspective
A customized strategy will look at many aspects of your unique life situation. From legacy planning and tax efficient income streams, to understanding cognitive aging elements, the better your advisor knows you and every facet of your circumstances, the better they will serve you.
Clear Explanations of Their Recommendations
You should expect thorough answers as to why those recommendations are being made based on your values. You should feel educated, empowered, and confident that the advisor’s recommendations are in your best interest before you take action.
Assistance in the Implementation of Your Plan, or Strategic Changes That Need to Be Undertaken
Your advisor should work closely with everyone on your team (CPA, attorney, retirement coach, family). A plan is just the beginning and needs to be recalibrated moving forward.
An Advisor That Is Available
You should have access to your advisor or their team to answer questions or get reassurance and support throughout your engagement.
In exchange for having your rights honored, you have the responsibility to work diligently and conscientiously with your advisor.
You must be prepared to discuss your financial life and the feelings that go with it openly and honestly. You should feel empowered and educated to make decisions moving forward in a timely manner.
With a competent, compassionate advisor in place, and other professionals working alongside you, you will be able to wisely navigate the growing complexities of this new season of life and the financial implications that arise.
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