3 Red Flags When Choosing A Financial Planner To Help Plan Your Retirement

If you are on the final approach to retirement there’s probably a lot of questions you’re looking for answers too.

How much do I need?

Am I on track?

What more should I be doing?

When can I retire?

How do I set it all up?

What don’t I know?

Probably the most important one, will I be okay?

Planning one’s retirement comes with much anxiety, worry, complexity and it’s emotional.

After all, it’s something you’ve never done before…

It’s likely you’re going to be looking for some real expertise to help guide you on your retirement journey.

To help figure it all out, so you can live a comfortable retirement and remove as many money worries as you possibly can.

Getting really good advice can be a game changer for you. You only need to look as far Vanguard in its research on the value of advice. It’s not just the financial benefits but also the non-financial benefits.

Choosing a financial planner to work with can be one the biggest decisions you make. You need  to choose wisely.

There are a number of things to look out for that can lead to you picking the right adviser for you.

Below we’ve outlined the red flags to look out for…

Product Focused vs Process Focused…

One major red flag is where the financial planner is focused on the product first and foremost.

Don’t get me wrong, the products you use are an important component of your retirement plan.

If they are focused on the investment aspect, mainly spend time speaking about the investment side of things. This is a red flag.

A real financial planner will have a process that you can continually go through to help you make the decisions you’ll need to make about your retirement plan.

However, what works for one may be an absolute disaster for someone else.

You may have even seen this on Facebook with some financial firms (who shall remain nameless) leading with product promotion first.

Setting up a Self Managed Super Fund for instance. Sure, for the right people this is a great way to manage your retirement savings.

Quite frankly, many don’t need the complexity…

If you are looking for someone to help plan your retirement, you need someone who has a good process.

Our process follows the framework in the book, ENOUGH.

Outlandish claims…

I was speaking with a client we recently worked with. He’d been looking for a financial planner to help him plan for retirement.

He spoke with a number of advisers who said they’d be able to get him 10% a year. Luckily for these guys they realised this was an outlandish claim and moved on.

As much as we all want high returns. It’s unrealistic for most and comes with risk most don’t want.

Recently, I came across another resource on Facebook…someone else in the retirement space.

As I was reading through their resource, I noticed a few outlandish claims…

One was that a wholesale super fund generates 3-4% more than an industry fund. What absolute nonsense. If they had similar assets the only differentiator would be cost.

Another was having an actively managed super fund over a passive protected you from severe market downturns.

I couldn’t believe this one. The bottom line is unless you have everything in cash, which I do not advise by the way. Everyone is going to experience falls in their investments when major events happen. The extent of that fall will be determined by the level of growth assets you have in portfolio.

A well designed portfolio will allow you to take on just enough risk to see you through retirement. A BIG enough “War Chest” to cover your income when investment markets are down. So you aren’t a forced seller.

Be mindful of outlandish claims.

Predicting Markets vs Focusing on What you can control…

If the adviser is focused on predicting or timing investment markets. It’s a total waste of energy that gets robbed from helping you make the most of your retirement.

No one has a crystal ball, nor can they predict what investment markets are going to do next. Unfortunately, there are still financial planners that think they can. It’s a major red flag…

You need someone who is going to be an active thinker, that’s going to be your coach on your retirement journey and that is a financial expert in the area of retirement planning.

Your retirement is like a project, with many transitions and decision points along the journey.

Markets are something that is out of everyone’s control. You need to focus on what you can control, like how much you have in your “War Chest” for when investments take a dive. Where your income will come from and how much risk you need to take.

There’s a significant amount of research proving that it’s difficult if not impossible to outperform investment markets. However, many still spend their valuable time and energy to do so. It’s a fruitless exercise.

With our clients we use the weight of evidence to help them invest in the right manner. Investing for retirement is different. Every investment decision is backed up by the retirement lifestyle each and every client wants to live with just the right amount of risk to avoid a retirement disaster.

The right skillset…

Not all financial professionals are the same. You need to be looking for someone who has the right skills and expertise to fit your situation and your needs.

Most financial planners are generalists. While they can talk about retirement planning it may not be what they do all day long.

Generalists work with people from all walks of life, 20, 30 and 40 somethings. It’s like going to your local GP.

They can consult and know about many aspects of health, but they are not going to do your hip replacement if you need a hip replacement.

They’ll help you identify if it’s something you might need but they will refer you off to the specialist to decide what you need and do the surgery.

The question to ask here is, does this person focus on what I need?

If you are wanting advice on retirement, are they focused on all aspects of retirement planning?

For instance, we focus on people within 10 years of retirement. It’s all we do, everyday. We help people plan for and guide them on their journey so they can live their comfortable retirement.

We’ve walked the retirement journey with hundreds of people spanning two decades…

We’ve seen what’s worked, the roadblocks people can’t see themselves and how to navigate the retirement landscape with ease.

Active thinker…

Is the financial planner an active thinker rather than working from a script.

The person you end up working with, needs to be a decision making partner. Someone who sits with you to explore all aspects of the decision you need to be making.

Helping you make a decision in a very organised manner.

There’s going to be many decisions that you will need to make that aren’t crystal clear. Sure you can think through them. But there will be a point where you need to make a judgement call.

So you need someone who can help you think through a decision in an organised way.

For instance, one of my long term clients was struggling with finding a suitable home.

A decision he’d been struggling with for some time. We spent numerous meetings working through his various options, what he was looking for and how much he could spend. Without impacting his retirement lifestyle.

After working through his options, the decision was made to explore demolishing and rebuilding his current home. Something that was not on his radar…

Make the next smart step and contact us for your complimentary Retirement Clarity Call below to start managing your retirement plan the right way, today.

Glenn Doherty – CFP – Financial Planner | Helping people within 10 years of retirement achieve a successful retirement

We work with people in Adelaide and around Australia via virtual meetings!

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