Why and how to pick an adviser

Bankrate Logo

Why you can trust Bankrate

While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for .

Boomers working with a financial adviser are more than twice as likely to be highly confident about their retirement planning as those who are planning for retirement on their own, according to a new survey by the Insured Retirement Institute, a trade organization of the retirement income industry.

The organization, whose members are mostly financial advisers, emphasized that working with one of their number greatly improves people’s confidence in their own ability to retire. The survey found that 53 percent of those working with an adviser say they are doing or did a good job preparing for retirement compared with 21 percent who say they did a good job, but didn’t have advice from an adviser. Among people working with an adviser, 94 percent have retirement savings versus 68 percent who aren’t working with an adviser.

The survey was released in honor of National Retirement Planning Week, emphasizing its consumer website RetireOnYourOwnTerms.org. The survey also found:

  • About 80 percent of boomers have retirement savings.
  • About half of those with savings have at least $250,000 stashed away.
  • Fifty-five percent of boomers have a retirement savings goal. That is an increase from 50 percent in 2013.
  • Nearly 40 percent say they would save less if the government took away tax incentives.

Tips on how to select a financial adviser

How do people choose an adviser? A panel of representatives from member organizations offered these tips:

Find out if your employer has an advisory service that it recommends. More employers are offering referral services and many people find an employer affiliation reassuring, says Rich Linton, president of individual markets for financial services company ING U.S.

Ask for referrals from friends and family. While this can be a good way to get going, Bruce Ferris, president of Prudential Annuity Distributors, recommends that you don’t just take your brother-in-law’s recommendation without interviewing the potential advisers to “see if you have comfort. Look for someone with training and certifications — that’s a great place to start — but pick someone who understands your issues. A lot of it is personality and comfort factor,” Ferris says.

Make sure the adviser you’re considering has the skill to do what you need. Some advisers are great at focusing on investments while others are especially good at preparing financial models, says Katie Libbe, vice president of consumer insights at Allianz Life. Be open enough to share your situation so the adviser can respond and explain how his or her style will mesh with your needs.

Pick an adviser who regularly works with people of your age who are in a similar financial situation. Some advisers specialize in high-income earners, while others are accustomed to working with people who have less.

Consider where you work. Government employees may need very different advice from someone who is in the corporate world. And if you’re self-employed, you also need different expertise, says Kevin Molloy, senior executive director and head of employer-sponsored business for insurer AXA.

Discover how you can get good, but cheap, financial advice.