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Financial Advisors for Seniors


Seniors can face a host of challenges as they get older. Retirement planning, paying for healthcare and estate planning are just a few that may first come to mind. Fortunately, financial advisors have the skills to help seniors meet those challenges. Let’s break down how a financial advisor could help you adjust your financial plans to address longevity, medical costs, taxation and other retirement needs.

What Is a Financial Advisor?

A financial advisor is a professional that helps people manage their investments, financial plans, businesses, taxes and estate plans. While financial advisors may have different educational backgrounds and specialties, they often earn certifications and apprentice with financial management firms to hone their skills and earn clients’ trust. For example, a financial advisor might become a chartered financial consultant (ChFC) to increase their competency in all financial topics or an enrolled agent (EA) to specialize in taxes.

Financial advisors can help seniors improve their financial situation through tax mitigation, retirement planning, estate planning and more. From helping you plan a budget involving Social Security income to maximizing your investment income, financial advisors have the skills and knowledge to help you better manage your finances.

How Much Do Financial Advisors Cost?

Typically, financial advisors charge clients 1% of the assets managed. While fees may fluctuate, figures above the standard 1% might be a red flag. A rate above 1% could cost you hundreds of thousands of your hard-earned retirement dollars. Therefore, it’s a good idea to ask your financial advisor about the fees they charge and how they earn money.

Financial advisors have multiple ways to charge clients. For example, some financial advisors charge a percentage of your assets, while others will charge an hourly or annual fee. Additionally, investment funds often have their own fees, so it’s recommended that you understand how your financial advisor invests and the costs the funds incur. If you’re unsure about costs, don’t be afraid to ask questions until you have clarity.

Whether your financial advisor makes money through investment commissions or a flat fee, it’s understandable if you’re concerned about how your financial advisor manages your money. Fortunately, you can work with a fiduciary financial advisor legally bound to act in your best interest. No matter who you work with, it’s vital to find someone you trust.

If you’re concerned about high fees, a robo-advisor might be a suitable alternative. Generally, robo-advisors charge between 0.25% and 0.5% of the assets managed. As a result, you could cut costs in half if you’re comfortable with technology. However, receiving financial advice from a digital source can be jarring. Also, an electronic financial advising service limits personalization – and there’s no substitute for face-to-face financial consultation where a trained professional goes over every detail of your financial situation.

How to Find a Financial Advisor

When looking for a financial advisor, it’s wise to shop around. Luckily, when trying to find a financial advisor, you’re not on your own – plenty of resources are available to aid your search:

  • SmartAsset’s free financial advisor matching tool and other online tools can streamline your search. By answering a few questions, you can match with up to three local financial advisors, interview each of them personally and decide which one fits you, all for free.
  • The people you trust most – family, friends and colleagues – may provide excellent recommendations for a financial advisor. Financial advisors who have a client of clients in your peer group may be a perfect pick, especially if they focus on working with seniors.
  • Online databases have up-to-date information on financial advisors in your area. You can look at the web-based search features of organizations such as the AARP, Garrett Planning Network, Certified Financial Planner Board of Standards, National Association of Personal Financial Advisors (NAPFA) and the Financial Planning Association (FPA).

What to Consider When Looking for a Financial Advisor

SmartAsset: Financial Advisors for Seniors

Every financial advisor is different, and it’s crucial to find one who can cater to your specific needs. Use the following criteria to help you discern the kind of financial advisor that’s right for you.

Credentials. A financial advisor’s credentials can be helpful, but beware – sometimes, less scrupulous financial advisors will use irrelevant or fraudulent qualifications to hoodwink clients. Even if your financial advisor seems solid, use the Financial Regulatory Authority’s website to check the definition of their qualifications. In addition, you can look up your financial advisor on NAPFA to check client reviews, lawsuits and more.

As a senior, you may find that financial advisors with one or more of the following five credentials may be best suited to help you:

Company size. Financial advisors can work alone, for small firms or within companies employing hundreds of professionals. You might prefer a standalone financial advisor in a relaxed environment. On the other hand, working with a big company that is well-versed in serving seniors and has a proven track record may be appealing. Regardless, it’s critical that your needs are understood and met and that you are comfortable with how the firm manages your assets.

Expertise. Certifications can help you understand what a financial advisor is best at, but asking about their level of knowledge is important, too. Depending on your needs, it’s a good idea to ask your financial advisor about how they can help you with key facets of your financial wellness, including:

Taxes. Seniors of all income levels prioritize reducing their tax liability as much as possible. Whether you’re concerned that the IRS might seize your Social Security payments or you have a question about how your individual retirement account (IRA) distributions affect your taxable income, your financial advisor should be competent in this area.

Retirement. Your quality of life in retirement is likely on your mind if you’re on the cusp of retirement or well into your golden years. Financial advisors can help you budget, invest wisely, withdraw funds from your retirement accounts efficiently and more.

Investing. Investing is as significant for seniors as it is for young professionals, even if you’re currently withdrawing money from your investments. If you’re concerned about your investments, ask your financial advisor about mitigating risk and maximizing gains.

Estate planning. Estate planning is essential to ensuring you’re all set to pass on your wealth to your family. You don’t need to be rich to make good use of an estate plan, and you can diminish how much your assets are taxed when they transfer to your heirs. As a result, it’s worth asking your financial advisor about their estate planning capabilities.

Minimum requirements. Some financial advisors only take on clients who have specific levels of wealth to manage. Whether a financial advisor requires clients to have $50,000 or $1 million may affect your ability to work with them.

Fee structure. As mentioned in depth earlier, fees are fundamental when choosing a financial advisor. It’s recommended to understand how your financial advisor makes money and to trust them when it comes to managing yours. If matters of compensation aren’t clear, you may experience suspicion and anxiety. That said, if something doesn’t feel right, there are plenty of fish in the sea – and it’s worth it to find a financial advisor you have peace of mind about.

Questions to Ask Financial Advisor Candidates

When interviewing financial advisor candidates, you can ask the following questions:

  • Do you have experience working with seniors?
  • Are you familiar with the tax and income issues that come with retirement?
  • What certifications do you have, and what clientele do you primarily serve?
  • Are you a fiduciary?
  • Do you have any disclosures, such as criminal activity or customer complaints?
  • What services do you provide?
  • What fees do you charge?
  • What’s your investment style?
  • How frequently will we meet and/or communicate?

Bottom Line

SmartAsset: Financial Advisors for Seniors

As a senior, you have specific financial needs, and it’s vital to follow your financial plan. Whether you’re working or retired, you’ll face various financial challenges, such as maintaining a certain level of income in retirement, managing your assets and navigating tax challenges. A financial professional can be the perfect guide to help you maximize your wealth and address financial stressors.

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