Article content
A recent survey found most workers trust their financial advisor. The same survey found most of them still doubt they're actually ready to retire. Those two facts sitting next to each other usually mean one thing: the advisor was trusted, but never checked.
Trusting someone and vetting someone are different jobs. Only one of them protects you if the advice turns out to be wrong.
Choose your next move
Where are you with an advisor right now?
Choose the situation closest to yours.
Focus on confirming what you've been told, in writing.
Confirm the Advisor Is a Fiduciary, in Writing
"Fiduciary" means the advisor is legally required to act in your best interest. "Suitable" is a much lower bar — it only means the advice has to be reasonable for someone in your situation, not the best option for you specifically. Plenty of people never learn which standard applies to their own advisor until something goes wrong.
Ask the direct question, and get the answer in writing. A verbal answer in a friendly meeting doesn't hold up later.
Checklist
Get fiduciary status confirmed, not implied
Write down exactly what you were told and when.
0 of 4 done.
Get the Fee Structure Written Down Before You Sign Anything
Fee-only, fee-based, and commission-based sound similar and are not. Each one changes who else might be paying the advisor, and how. Ask for the actual dollar estimate at your account size, not just a percentage that's easy to gloss over.
Get a specific number, then compare it against at least one other advisor before deciding anything is normal.
Checklist
Get a real number, not a percentage
A percentage without a dollar figure is easy to underestimate.
0 of 4 done.
Document Every Recommendation Before You Act On It
People lose track of what was actually promised. Six months after a meeting, "I think they said" isn't something you can act on, or dispute. Write down the specific recommendation, the reasoning given, and the date, every single time, not just for the decisions that feel big.
Keep that record somewhere you'll actually find it again.
Get a Second Opinion Before Any Irreversible Move
Rolling a pension into an IRA, buying an annuity, or changing a Social Security claiming strategy are hard or impossible to undo once they're done. Get a second, unaffiliated opinion first, especially if the recommendation happens to increase the advisor's own compensation.
Work through this in order, and don't skip the comparison step because the first opinion sounded confident.
Timeline
Before you make an irreversible move
Check off each step as you complete it.
Write down any recommendation involving a rollover, annuity, or claiming-strategy change.
Ask a second, unaffiliated fiduciary advisor to review the specific recommendation.
Put both recommendations side by side in writing before deciding.
Keep the final paperwork together with your dated notes from both opinions.
If the advisor conversation was triggered by an estate or beneficiary question, read Estate Planning Without Adult Children next.
Save your plan
Save what you confirmed here so you have it on hand before the next meeting or decision.
Common questions
How do I know if my financial advisor is a fiduciary?
Ask directly: 'Are you always required to act as a fiduciary for my account?' rather than whether they follow fiduciary principles, and get the answer in writing. You can also check the advisor on the SEC's Investment Adviser Public Disclosure database or FINRA BrokerCheck before your first meeting.
What's the difference between fee-only and commission-based advisors?
Fee-only advisors are paid directly by you, with no commissions from products they recommend. Fee-based and commission-based advisors may earn extra compensation from certain products or referrals. Ask which structure applies, and request the actual dollar estimate of annual fees at your account size, not just a percentage.
Should I get a second opinion before rolling over my pension or buying an annuity?
Yes, especially since these moves are hard or impossible to undo once completed. Get a second, unaffiliated fiduciary advisor to review the specific recommendation, particularly if it happens to increase the original advisor's compensation, and compare both opinions in writing before deciding.
