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Can Your Financial Advisors, Attorneys & Accountants Build You a Unified Retirement Income Plan?

Can Your Financial Advisors, Attorneys & Accountants Build You a Unified Retirement Income Plan?

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Jamie Hopkins - Forbes Contributor

As you plan for retirement, you might find yourself with a whole army of advisors handling different aspects of your life, finances, and future. But are your attorneys, accountants, financial planners, investment brokers, money managers, insurance agents, and retirement advisors all on the same page when it comes to planning for your retirement? In many cases, the answer is simply “no.” That is, your many different advisors typically do not take the initiative to coordinate their efforts, and often do not have all the information they need to effectively develop an integrated, holistic retirement plan for you.

This article provides a few simple steps that both advisors and clients can take to ensure a more unified advisor team, and as a result, a more cohesive retirement plan.
This is not to suggest that there are no benefits to having multiple retirement plan advisors. Each type of professional is often an expert in a specific area that needs specialized attention. However, it is crucial that the client performs certain tasks to better ensure a successful retirement advisor team. What can a client do to make sure he or she has an effective team of advisors?

Pick the Right Advisors. A successful team of advisors starts with choosing the right people. First, you should check into the advisor’s credentials, make sure they are up-to-date with their designations, professional service groups, and other professional requirements, and ask for references. The client should have a very clear understanding of the advisor’s specialty area, what the advisor will be doing, and how the client will be charged for these services.

Have the Right Number of Advisors. All of your advisors should serve a specific purpose by providing you with valuable advice and services. When planning for retirement you might want to consider having an insurance agent, an investment professional, an attorney, an accountant, and a financial professional to coordinate your retirement plan. However, a client should not be too hesitant to replace an advisor who is not performing. Additionally, while relationships are important, employing family members or close personal friends can become unpleasant if the business relationship turns sour.

Identify a "Coach"

Your financial planner will often be the “coach” of your advisor team. They will help implement your retirement plan, assist you in developing a strong team of advisors, monitor your plan, and set forth a strategy to update your plan in case of unforeseen problems or changes. Without a good coach, your retirement advisor team could be left without the proper direction and guidance to successfully develop, monitor, implement, and coordinate a unified retirement plan to meet your goals and needs.

Prioritize Your Goals

Prioritize Your Goals. objectives, you need to know what you want in retirement. This might be as simple as establishing a specified level of retirement income, or as complex as “previewing” retirement while at the same time protecting against common retirement risks. By previewing retirement, you start to do some of the things you want to do in retirement, enabling you to fine-tune your plan to meet your priorities. Previewing retirement also allows you to pick the activities and goals that are most important to you in retirement.

Verbalize Your Goals

After you determine and prioritize your retirement goals, you need to communicate these goals to your advisors. This also means keeping your advisors up-to-date on your priorities, as your goals will likely evolve as you enter different stages of your life. Your advisor team cannot help you meet your goals if they are not clearly defined and communicated.

Inform Your Advisors of Each Other

Your advisors need to know you are working with other advisors. If you do not make sure your estate attorney knows you are also working with a financial advisor, you could undermine certain aspects of his or her work on your retirement plan. It is not a bad idea to have some or all of your advisors at a meeting together to ensure everyone knows their unique role in your retirement planning process. This could be difficult to coordinate, but can be extremely valuable.

While the client’s role in setting up a proper team is important, the role of the “coach” cannot be underestimated. What should a financial advisor being doing in the “coach” role to create, manage, and direct a successful retirement advisor team?

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  1. Stay Educated. In order to be the “coach” of the retirement advisor team, the financial advisor needs to continue to pursue advanced educational training, such as the Retirement Income Certified Professional Designation (RICP®) offered through the American College, the ChFC®, or the CFP®. Retirement planning is complex, and financial advisors must be educated on a wide range of topics to effectively plan for their clients. As such, it is important to keep one’s skills and knowledge up-to-date through lifelong learning and training.
  2. Build a Team. All attorneys and financial professionals are not well-suited to be part of a retirement advisor team. Accordingly, the financial advisor needs to make sure that the right people are brought into the team. These professionals should be knowledgeable in retirement planning issues and understand the client’s goals. If the client is choosing some or all of the advisors, some advisors might bring misconceptions about the retirement income planning process. As such, the financial advisor might have to become an advocate for the client’s interests, and help educate other advisors on areas outside of their expertise. For example, an attorney might not see the value in using annuities in a retirement income plan, leaving it up to the financial advisor to explain the role annuities can play in the client’s retirement plan.
  3. Communicate with Client and Advisors. The financial advisor must communicate effectively with both the client and other advisors. In order to lead the team, the financial advisor must stay in contact with the client and keep abreast of any financial, personal, or other changes that would impact the client’s retirement plan. Additionally, the financial advisor must communicate the client’s needs and goals to the other advisors, ensuring each individual advisor knows his or her role in the planning process.
  4. Manage Client Priorities. Often times, a task perceived as crucial to the client and financial advisor may not be communicated as such to the client’s attorney or other professional, delaying the task’s completion. According to Allen McLellan, CFP®, ChFC®, Adjunct Professor of Insurance at the American College, the financial advisor is both the “coach” and “quarterback” of the client’s retirement advisor team. Professor McLellan states that the financial advisor must help create the plan and effectively communicate the client’s priorities to the other members of the retirement advisor team. For example, an attorney might not feel that finishing a will for a client is always a top priority, but to the client their legacy goals could be a top priority needing immediate attention. Consequently, it is the role of the financial advisor to ensure these priorities are effectively communicated to all of the members of the team.
  5. Planning is a Process. According to Assistant Professor of Financial Planning Craig Lemoine, Ph.D., CFP®, “in order to create a successful retirement advisor team, the financial advisor needs to remember that planning is a process
    and not a product.” The planning process should meet the client’s goals and not just exist to sell products and services the client does not need. Keeping this in mind, the financial planner will be in a better position to make decisions in the best interest of the client.
  6. Serve the Client. The financial advisor needs to make sure that the goal’s and best interest of his or her clients always come first. While this step is listed last, it is really the most important. All of the other decisions made throughout
    this process should focus on the client’s best interests. This will help insure that the team is designed and managed to maximize the client’s retirement plan. Also, this will create successful client relationships and happy clients.

While each retirement advisor team might look slightly different, these key points should be followed to best meet the client’s retirement goals. Both the client and the financial advisor play key roles in ensuring the creation of a well-organized and highly effective retirement advisor team.

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