Finding the Right Financial Planner During a Recession
The word “recession” by itself often causes a lot of people to panic, and can lead to investors making quick decisions that can harm their financial health. Working with a financial planner during a bear market may help investors feel more prepared and confident in their ability to beat whatever might come their way.
What’s the best way to find a financial planner during a potential recession?
1. Find my credit
The agent puts your best interest in mind over anything else – if the advisor does not have a fiduciary duty to you, they may recommend products that put more money in their own pockets, even if that’s not the best thing for their clients.
How do you tell if a financial planner is fiduciary? If the advisor or company is registered with the SEC or if they have a certified professional rating from a “Certified Financial Planner” firm, they are also fiduciary because each of the SEC boards requires a fiduciary duty.
2. Check their credentials
If your potential advisor is CFP ® certified, you can visit the CFP Board website to verify their credentials. You can also check with a consultant or company through the SEC website.
3. Find out what type of counselor will work best for you
Are you looking for a fee-only advisor that charges a fee, either by the hour or as a percentage of your assets that they manage? Or do you want to work with a consultant who earns a commission on products? Keep in mind that any advisor who only earns commissions cannot be fiduciary.
You may also choose to work with RIA, a credit advice firm with several individual investment advisors’ representatives. Robo advisors are often a place where you can manage your money, but they lack a lot of the insight and planning that you get with a human financial planner.
4. Going into details
Ask about the account minimums, how the advisor will be paid, and what financial planning services will be included.
Before embarking on a long-term relationship with a financial planner, especially during a volatile market, you want a clear understanding of what you can expect and how the relationship will develop. Find out how often you will meet, when you will hear from them, how often you will be notified of changes in your portfolio and market and whether they will collaborate with other members of your financial team, such as your accountant or a lawyer.
5. Ask questions that will put your mind at ease
You want to make sure that your financial planner listens honestly and cares about your situation, and that he understands your goals and desires.
- If you view the market pullback as an opportunity to potentially grow your assets, talk about it with any potential planner and make sure they understand your goals.
- If you are concerned about your asset allocation, make sure you understand their processes for this during a downturn.
- If you’re already thinking about your savings or have cash on hand, voice those concerns and see the answers you get.
It is critical to ensure that your planner listens to your specific needs and questions, and that they will get back to you quickly with proper care and attention.
Finding a financial planner during a recession isn’t much different than finding a planner at any other time – you want to prioritize finding a financial planner that best fits your specific needs. Take time to make sure that you and your planner are a good fit, as the client/planner relationship should be long-term.
Your planner should be someone you can count on when times are tough or great.
President, Partner and Financial Advisor, Diversified, LLC
In March 2010 Andrew Rosen joined Diversified, bringing with him nine years of experience in the financial industry. As a financial planner, Andrew builds lifelong relationships with clients, coaching them through all stages of life. He holds Series 6, 7, and 63, as well as property/accident and health/life insurance licenses.