After a sideways last few years, it might be time to sit down with your senior, or at least get their approval to review their finances especially if they have been managed, or mismanaged by their Financial Advisor.
Things to evaluate:
- A high level of transactions, ask your senior if he or she gets a lot of phone calls from their advisor claiming that they need to “do something.”
- Liquid and inappropriate investments such as high risk assets like junk bonds and penny stocks.
Seniors may become targets for unethical financial advisors and Elder abuse. As health and wellness decline, seniors may no longer follow the details of the markets and their accounts, or even their own financial situation. Be sure that you have at least reading access to their financial accounts and if in doubt, call the financial advisor yourself. Make the advisor aware their activity is being scrutinized. I can’t emphasize this more. Although the vast majority of advisors are protective of their clients, some have no such scruples and you don’t want a lifetime of savings to disappear in inappropriate transactions. If your senior is working with a financial advisor, find out what annual fees are assessed. In a low growth world, even a 2% fee seriously erodes gains and can even leave your senior with negative balances.
If you chose to seek a new advisor, Smart Money Magazine offered the following advice in its’ October 2011 issue, which I have paraphrased.
- Check their certification and know what it means,
- Look up local advisors who are certified with registries
- Know what you need (I recommend a planner who has comprehensive knowledge in estate planning, retirement and taxes as well)
- Know how your advisor gets paid and then interview potential planners to make sure you have a comfortable relationship with a competent advisor
- Don’t be afraid to ask for referrals from satisfied customers
- Lastly, be careful not to be ‘wowed’ by the first product offered nor fancy graphs and charts
Have several conversations with your elder and the advisor. Be sure to work with an advisor who sets regular meetings to evaluate performance. For more detailed information, see the link to the article here.