What You Should Look for in a Financial Professional

For most Americans, the do-it-yourself approach to finance can take you just as far.

While many people begin to manage their own long-term financial plan, they may decide that it is time to start working with a financial professional when life changes bring new challenges. These changes can be moving to a new phase of life, such as getting married or having a child, or considering financial opportunities, such as buying a home or starting a new job.

Regardless of the circumstances, the vast majority of Americans say they appreciate the advice of a financial professional, according to the new 2022 Retirement Risk Readiness Study * from Allianz Life Insurance Company of North America (Allianz Life). In fact, nearly 9 out of 10 (86%) said working with a financial professional would support their future ambitions.

So how do you go about finding someone to help you design a retirement income plan?

Finding a financial professional can feel like a daunting task. For many, the first step is to seek recommendations from family or friends. But since financial health is often closely related to age, a family member’s financial professional, for example, may not be quite the right fit for you.

This is probably because you are not in the same phase of life. The latest Allianz Life study found that the skills they value or require from a financial professional change as people move closer and then move toward retirement.

While 44% of respondents said making sure they have enough money is one of the most important things financial professionals can do to help, the study found that priorities change as people get older. You will want a professional who can offer customized financial strategies that not only fit your current life stage but also provide contingencies that provide for your financial future.

Here are some tips to help you find a financial professional who might be best for you and your future.

Getting to know different types of financial professionals

Before you start asking for recommendations or searching online, ask yourself what kind of help you really want. You will also need to think about what type of compensation you want the professional to receive. Some work on commissions, others on fees from your accounts and others on a combination of these.

A good first step is to take time and learn more about the different types of financial professionals who can help you. There are different types of financial professionals who have different training, certification and responsibilities.

One way to think about the different types of professionals is to separate them by how they are paid. Professionals who only pay fees make money from fees paid by clients for their services which can be a percentage of assets. Other professionals are paid by third parties by earning a sales commission for the sale of certain products.

Some financial professionals are designated as fiduciary and bound by fiduciary duty. This means that they are legally obliged to work in the best financial interest of their clients. Other professionals are held to a standard of fitness, which means they have to make recommendations that are suitable for you based on the questions you answer, such as how comfortable you are at different levels of risk. While some advertisements present one method over another, the reality is that financial advisors are subject to inquiries from a number of regulatory bodies and oversee the advice and investments they provide.

Determine what services you need

Since finances are multifaceted, you will want to think about what kind of help you need. Is it specific to one area – budget, tax, investment advice, retirement plans, debt repayment, insurance products, estate planning – or do you need help with every aspect of financial planning?

Keep in mind that your needs are likely to change as you move through different phases of life.

According to our study, people who are more than 10 years away from retirement are more interested in helping a financial professional secure their children’s financial future (35%), balance their budget (33%) and reduce debt paid (27%). .

Those who plan to retire within the next 10 years are most interested in getting help to maximize their social security benefit (34%) and make the best decisions about Medicare and health insurance (30%).

Retirees are more interested in professional help with maximizing investment returns (56%), protecting investments from market loss (45%) and reducing their tax burden (43%).

You will want to find a financial professional with the right strengths for your clear planning needs. Many financial professionals specialize in specific areas, such as retirement planning. Others may be better suited for young people who are just starting out in their careers and want to build a solid financial foundation.

To find the right match

It is important that you take the time to do your research and evaluate your options. If you really want help with retirement planning, but your financial professional focuses mostly on taxes, you are wasting time that can be beneficial in achieving your goals. You need to find a professional or an office that can provide advice through all the future phases that your future may hold. It is not uncommon for individuals to change advisor throughout their financial life, but it does take time to build a relationship and trust, so think of the future, not just the present.

Talk to several financial professionals before choosing one. Go to those initial meetings like a job interview. You want to find out more about this professional’s systems and strategies, and make sure it fits well with your personality and specific financial situation. While you want to do your research on the individual beforehand, no matter how high they are rated by others, you need to feel confident and comfortable with this person. They will know a lot of details about you and your finances, so trust is an ultimate goal.

If you’re not sure what to ask, here are some ideas.

  • How is your typical customer?
  • How would you describe your approach to helping customers?
  • What technology do you have to help customers?
  • Do you develop written financial plans?
  • How do you make money?

The right financial professional can help you with financial strategies so that you can lead the life you desire. Because financial needs change over time, do not feel bad when you outgrow your current financial professional and determine that it is time for a switch. As you move through life, make sure the relationship still works for you. It is never easy to change, but change is inevitable.

* In February 2022, Allianz Life conducted an online survey, the 2022 Retirement Risk Readiness Study, with a nationally representative sample of 1,000 individuals aged 25+ in the adjacent U.S. with an annual household income of $ 50k + (single) / $ 75k + (married / partner) OR taxable assets of $ 150k.

Vice President, Advanced Markets, Allianz Life

Kelly LaVigne is Vice President of Advanced Markets for Allianz Life Insurance Co., where he is responsible for developing programs that assist financial professionals to serve clients with retirement, estate planning and tax-related strategies.

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