Finding a Financial Advisor for Your Elderly Parents
Helping your parents manage their finances is a daunting challenge for many in the "sandwich generation." If you find yourself caring for both your own kids and your aging parents, consider the benefits of hiring a financial professional to take some of the burden off your shoulders.
The first step
As soon as you realize that you'll need to help your parents manage their finances, it's vital that you ask a lawyer to draft a power of attorney (POA). This document gives you the legal authority to manage your parents' financial affairs. Without a valid POA, you will be severely limited in the help and advice you can give your parents.
Hiring the right financial professional
Start by seeking a financial professional with designations such as Certified Financial Planner (CFP), Personal Financial Specialist (PFS), Chartered Financial Analyst (CFA) and Chartered Financial Consultant (ChFC). These are financial professionals who undergo extensive training and oversight.
Although you can get information from family and friends, some of the best referrals may be from professionals who deal with elder affairs on a regular basis. Your lawyer or accountant may know of financial pros who specialize in helping families in your situation.
After gathering a few recommendations, it's time to sit down with each candidate and spend some time getting to know them. Some of the questions you should ask include:
- What experience do you have, especially with people in my circumstances?
- How long have you worked for this firm or in this profession?
- What products and services do you offer?
- What licenses do you hold?
- Are you registered with a state or federal agency or association?
- How are you paid for your services?
- Have you ever been disciplined by any government regulator for unethical or improper conduct or been sued by a client?
If the professional is a Registered Investment Advisor (RIA), you should ask to see both parts of the Form ADV that must be filed with the Securities and Exchange Commission or state securities agency. The form includes information about the advisor's background and fees.
Although you want reasonable answers to these questions, it's also important to choose someone you feel comfortable with. Be wary of any potential financial professional who makes you feel uneasy or pressures you to make a particular investment.
Take the next step...
Learn about annuities. Let The Principal help you determine if an income or deferred annuity is right for you or other family members looking for a secure income stream in retirement.
