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Question for the Money Doctors

Question submitted on Apr 21, 2010.

Question

I am retiring in the next 2 months. How do you go about picking a financial advisor? Lots of interest, but no clear cut winner.

Answer

Look for a financial advisor who is either a CPA with a PFS (Personal Financial Specialist) designation.  Either of these advisors are licensed and regulated and have passed very complex tests and are required to get continuing education each year.  One should also consider how the financial advisor is compensated.  Some advisors are paid on a transaction basis, which provides a greater incentive to sell you a particular investment because of the commission he or she earns.  More often financial advisors charge a percentage of the assets they manage, which would be my preferred arrangement.  Ask for references, although with the privacy policies that most companies have don't expect much.  Find someone who takes a personal interest in you.  Talk to someone who focuses on the long-term goals and doesn't call you with "hot stock tips". 


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