5 Tips for Finding the Right Money Manager

By Tuesday, July 26, 2016 0 No tags Permalink

One of the least mentioned strategies for retirement planning is hiring a money manager. You might feel embarrassed about discussing your finances with a stranger, or maybe you distrust money managers as a whole. However, working with the right retirement money manager is one of the best ways to plan and save for retirement. A great financial adviser will prevent you from making emotional decisions and bring a wealth of knowledge that, while you may be very good at your own job, you don’t have about financial matters. How do you find the right money manager? Follow these five tips.

  1. Ask for Recommendations

Ask your friends and relatives if they can recommend a financial planner. Seek advice from someone who is in a similar situation in life. If you’re just out of college, ask a fellow graduate. If you’re raising children, ask someone who has children.

  1. Use Online Money Manager Search Resources

To get more money manager leads, check the National Association of Personal Financial Advisors (NAPFA) website. NAPFA is the leading fee-only financial adviser professional association in the United States. Association members must meet eligibility requirements and pledge to act in their clients’ best interests. You can search for advisers by location or by name.

Also check the Certified Financial Planner Board of Standards, Inc., (CFP) website for up-to-date membership information and to see any disciplinary actions taken.

  1. Ask About Pay Structure

Once you have a few names, it’s time to get down to the nitty-gritty. There are several different ways money managers make money. One is commission-based. The rap on commission-based payment is that the manager may lead you toward specific funds in order to get a bigger cut.

Fee-only advisers perform services for a set fee. Most people prefer to know exactly how much they’ll be paying their money manager.

Finally, there are money managers who charge by the hour. If you are just starting out and have few or no assets, this type of pay structure might work for you. Once you’re past the starting-out phase, however, you’ll do better moving to a fee-only adviser.

  1. Check Credentials

Ask if your money manager has ever been convicted of a crime. Run a Google search on the individual’s name. Ask for references of current clients. Ask for current certifications. Make sure everything checks out.

  1. Request an Interview

The relationship you form with your money manager should be one where you both work toward the same goals. You may speak with a money manager who is highly recommended but doesn’t mesh with your personality. That’s fine. Find one who does.

Compare investment philosophies. Ask how the money manager plans to invest your money. Does the adviser ask questions about your goals? Does the adviser listen and react appropriately to your comments? Ask if the manager has experience working with people at your financial level and with your goals.

If an adviser candidate says, “I can beat the market,” walk away. A real manager will offer solid investment strategies, not empty promises.

After you’ve found the right money manager, stay involved in the process. After all, you may not know the ins and outs of investing, but it’s your retirement on the line.


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