There comes a point in every person’s life where the prospect of retirement becomes ever more clear on the horizon. For some people, this is a warm welcoming — these are people who have saved their whole lives who are wholly prepared to enjoy the final era of their life in bliss.

However, for those who haven’t adequately prepared, retirement age is like a looming shadow that grows bigger and bigger, threatening their peace of mind, digging a deeper pit of worry every day.

Preparing for your retirement and managing finances isn’t a skill that everyone was born with. And that’s okay — this is the reason financial advisors exist. Unfortunately, you could potentially make things worse for yourself if you don’t find the right financial advisor.

Are you looking to hire a financial advisor to help you with retirement income planning, debt management, investments, or any other aspect related to your wealth? Here are some things to look out for when you’re hiring a professional.

What Education and Experience Do They Have?

The first question you want to ask, naturally, is “How qualified are you to manage my money?”

Just like you wouldn’t hire a veterinarian to be your personal doctor, you wouldn’t want to hire somebody who’s not actually good with money to manage your finances. Here are some questions that will be useful to ask:

  • Are They Educated in Finance? As with most professions, a degree isn’t always a telltale indicator of the quality of a professional’s work, but it also never hurts to have an academic history in the world of finance. Did your prospective financial advisor graduate at NYU Stern, or at their local community college? You don’t want to write off a financial advisor based on their academic history alone, but it can be an important ingredient to compare with their other qualifications.
  • Are They Experienced? It’s not enough to just read about wealth management in books — you can’t know whether or not a wealth management professional is worth their salt unless they have some kind of history to show for themselves. You’ll want to look through their website, read client testimonials, and ask them directly what kind of experience and achievements they have under their belt.

What Certifications Do They Have?

This could have been included in the last point, but it’s significant enough to merit its own section. In short, anybody that you hire to advise your finances should be certified to do so.

There are several different certifications that financial advisors can obtain, and familiarizing yourself with them can help you to understand how competent your advisor may or may not be. Here are some of the certifications in the world of professional wealth management:

Certified Financial Planner (CFP®): Arguably the biggest badge of honor in the world of financial planning, you can count on somebody with a CFP® certification being experienced and knowledgeable in their craft. To obtain a CFP® designation, you have to pass a comprehensive exam which requires copious amounts of research and homework. More importantly, you need at least three years of experience. No matter who you sign up with, it won’t be their first rodeo if they’re a designated Certified Financial Planner.
Certified Public Accountant (CPA): Certified Public Accountants are just that — accountants who have gone through extensive education to be qualified in money management. To become a CPA, one has to pass the Uniform CPA Exam, which, by itself, is a test which takes sixteen hours to complete. The test is formulated by the American Institute of Certified Public Accountants (AICPA) and administered by the National Association of State Boards of Accountancy (NASBA).
Chartered Financial Analyst (CFA): The become a designated CFA, you need at least four years of relevant work experience, complete the comprehensive CFA Program, become a member of the CFA Institute, and demonstrate adherence to impeccable ethical standards as defined by the CFA Institute Code of Ethics and Standards of Professional Conduct. In other words, becoming a CFA is no joke. In fact, fewer than 20% of candidates who begin the program make it all the way through.
Accredited Financial Counselor (AFC®): Anybody with an AFC® designation has done a lot of work to get there. Functionally, an AFC® is very similar to an CFP®. CFP® is, for the most part, more well-known and considered to be the industry standard, but the CFP® certification involves more coursework to be earned, so you can know that anybody with this designation has done their fair share of research.

Just like with education and degrees, you may not want to make a judgment call on a financial planner based on their certifications alone. But, let’s just say that the phrase, “the more the merrier” applies here. Any of the above certifications requires a staggering amount of work, dedication, and professional experience to achieve.

Meet Our Experienced Team of Financial Advisors

That’s it for part one of our blog post! In part two, we’ll look at the ethical side of financial advisors, such as their reputation, how they get paid, and whether or not they’re a registered fiduciary. In the meantime, contact us today if you’re in need of quality guidance from experienced financial advisors! Kennedy Wealth Management has been serving Calabasas, Woodland Hills, and the surrounding area for years.