Know Your Financial Adviser: New Guide From CFPB

Like planning for retirement, choosing a financial adviser can be much more challenging than it sounds—especially for senior needs. Last week, the Consumer Financial Protection Bureau (CFPB) released “Know your financial adviser,” a guide to help you ask the right questions when shopping for an adviser. Did you know that titles like “veteran’s adviser,” “retirement adviser,” “senior specialist,” “benefits coordinator” or even “financial planner” don’t always mean the professionals are qualified to help you manage your money? Some titles require in-depth training, while others are easily picked up over a weekend.

For some military retirees, the decision is complicated even further by the need to find an adviser who understands the complexity of their retiree pay, veteran’s benefits, or disability benefits. This adviser should also understand the full financial impact of other benefits like TRICARE, commissary privileges, survivor benefit plans, and veteran’s service organization membership benefits.

Here are four things to think about when evaluating a financial adviser’s title or credentials:

How much training is required? Senior financial planning is a complex field which includes topics like estate planning, income tax laws, and investments. Some titles therefore require college-level coursework and passing tough exams, which can take many months or even years to complete.

Is your adviser qualified through a training program that holds its members to strict ethical standards? You should be able to file a complaint easily with the organization that issued your adviser’s financial title, as they may discipline or ban members who don’t follow the rules.

Is your adviser’s financial title accredited? Accredited programs have taken important steps to ensure the quality of their training.

Does the adviser have an extensive background working with a specialized group like military retirees? Just because someone calls themselves a veteran’s adviser doesn’t mean they know anything about military retiree pay systems, veteran benefits, or even the military, for that matter.

In addition to learning how to find a qualified financial adviser, you can also protect yourself by learning how to spot signs of potential financial fraud by phony advisers looking to exploit you.  You can download a copy of the CFPB’s previously released Money Smart for Older Adults – Prevent Financial Exploitation guide to help you spot the warning signs.

Most financial advisers have worked hard to earn the knowledge and skills required to help you. But credentials and promises alone don’t guarantee expertise or the quality of someone’s training. It’s up to you to look closely at the training, background, and quality of service when picking someone who promises to help you protect and grow your well-earned nest egg.

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