This is why many people still prefer to build an ongoing, personal relationship with a financial advisor. In fact, a 2017 study by LendEDU found that even among millennials currently saving for retirement — a generation with a tech-savvy reputation — 46 percent use a human financial advisor.
Financial advisor Chris Casey explains Mutual of Omaha's investment philosophy: Listen to the customer, help set goals, and create an individualized plan to reach those goals. Read Transcript
Just like no two families have identical financial situations, not every financial advisor has an approach that works with yours. So how do you find one who's compatible with you?
Your first step is to research advisors online. Once you've created your list of potential advisors, your next move is to contact them to set up introductory meetings. Be sure to ask any advisor you're considering to provide you with a copy of Part 2B of Form ADV, also known as a brochure supplement. Investment advisors are required to provide this document, which discloses such items as the advisor's business practices, fees, conflicts of interest and disciplinary information.
Choose an advisor you'd be comfortable having conversations with - even hard ones.
Choosing a financial advisor can be crucial to securing your family's financial future, so the decision can't be made on gut feeling alone. Here are some questions you should ask to see if your could-be financial advisor is compatible with your financial goals, risk tolerance and financial style.
How are you paid for your services?
A financial advisor may use terms like "commission," "assets under management" or "fees." Some of these payments, such as a commission, come from the institutions an advisor works with (commissions and 12b-1 fees can also be made up of the customer's money). Others, like an annual retainer, are something you'd pay out-of-pocket to the advisor. The most important thing is to be aware of any costs you will pay. You also want to feel that the advisor is trustworthy and will put your interests before his or her own when recommending financial products.
How (and how often) will you communicate with me about my finances?
You want to know if a financial advisor will be available when you have questions and will proactively contact you when he or she thinks a change in your portfolio is needed. Some of this comes down to the value of the assets the advisor is managing for you, and some of it is based on personal communication style. The goal here is to build a relationship based on shared understanding and expectations to create a communication plan together.
Which financial products and services do you offer your clients?
Even though you’re trusting an advisor to manage your finances, you need to know he or she will be forthcoming about where your money will be placed. Make sure to get a list of products and services along with the fees and investment objectives. In any discussion of investment products, the advisor should start by asking about your risk tolerance and goals.
How do you see life insurance fitting into an overall plan?
Life insurance is a way to make sure your loved ones can be more financially secure in the event of your death. By carrying life insurance, you can keep the savings you've built over the years separate from the money your family might need for things like funeral expenses or paying debts. The advisor should start with your needs, not a number. When the advisor suggests the amount of life insurance you'll need, he or she should consider the number of people who rely on your income, how much debt you have, your family's monthly living expenses, ongoing expenses like college education or special care, and how long you want the money to last.
Is retirement income planning part of your practice?
You'll want to hear that the advisor is experienced in creating plans for monthly retirement income to cover expenses. These days, fewer people will have pension income to rely on in retirement, so it's important to consider other ways of establishing monthly income instead of just working toward saving a large sum that you'll draw down.
Finances play a major role in reaching your goals and providing for your family, so you'll want to build a long-term relationship with your financial advisor. Choose an advisor you'd be comfortable having conversations with — even hard ones. The best advisors are those who help with financial stresses and successes. This is why, more than listening for any specific answer, you want to choose someone you can really work with.
Ready to start looking? Find a Mutual of Omaha agent/producer near you.
Registered Representatives offer securities through Mutual of Omaha Investor Services, Inc., Member FINRA/SIPC. Investment Advisor Representatives offer advisory services through Mutual of Omaha Investor Services, Inc. Mutual of Omaha Advisors is a division of Mutual of Omaha Insurance Company.