Choosing the Best Retirement Advisor: Common Mistakes to Avoid

In a recent episode of the “Retirement for Life” podcast, host Chris Cyr, the founder of Cyr Wealth Advisors, discusses a critical issue: less than 5% of Americans receive the quality financial advice they need for a secure retirement. 

This blog post will unpack the key takeaways from the podcast and provide actionable steps to ensure you don’t fall into the majority who miss out on vital financial guidance.

The Importance of Choosing the Right Advisor

Here’s a shocking statistic: more than half of affluent Americans forgo professional financial advice altogether. This decision often stems from a lack of understanding of what an experienced financial advisor can offer and the belief that they can manage their finances independently. However, this approach can lead to significant financial missteps, particularly as retirement nears.

Selecting the right financial advisor is one of the most important decisions for yourself and your financial future.  One way to think of it is this:  Imagine thinking you have a skilled pilot flying your plane, only to discover it’s on autopilot with no one in the cockpit. It feels safe until you realize no one’s there to handle unexpected turbulence or guide you to a safe landing. 

The Emotional Toll of Bad Advice

We encounter many people facing financial turmoil due to poor investment advice. Many retirees have portfolios designed for someone much younger, causing them significant financial stress. This illustrates the dire consequences of unsuitable financial planning.

Cyr Wealth Advisors work with you to understand your financial goals and concerns. From there, they ensure your portfolio includes various tax, risk prevention, and guaranteed income strategies. This intervention can transform your financial outlook and provide you the stability you need later in life. 

Why Affluent Americans Skip Advisors

Many affluent individuals avoid financial advisors due to misconceptions about cost and a reluctance to seek help. We’d argue that the cost of a fiduciary advisor, typically around 1% annually, is a small price to pay for the comprehensive guidance they can provide. This fee often translates into significant savings and better financial outcomes in the long run.

It’s challenging to admit you need help, particularly with something as personal as your finances. However, just as you wouldn’t skip a medical check-up, you shouldn’t ignore the need for professional financial advice.

Types of Financial Advisors

At Cyr Wealth Advisors, we use the term Level 5 Advisor,” which we developed to help people understand the varying levels of service financial advisors provide. Here’s how it works:

1. Level 1 Advisors: These individuals are primarily salespeople, often working on commissions from financial products, such as mutual funds and annuities. Their advice may not always be in your best interest.
2. Level 2 Advisors: These advisors act fiducially but may only do so part-time. They might mix fee-based and commission-based services, which can lead to conflicts of interest.
3. Level 3 Advisors: These professionals provide more comprehensive financial planning but may still lack a full fiduciary commitment.
4. Level 4 Advisors: These advisors offer holistic financial planning, considering various financial factors and providing complex, personalized strategies.
5. Level 5 Advisors: The pinnacle of financial advising, these professionals are full-time fiduciaries who integrate investment management, tax strategy, income guarantees, and more into their clients’ plans.

How to Find a Level 5 Advisor

Knowing the right questions to ask financial advisors you are considering hiring is critical.  Relying strictly on word-of-mouth or referrals won’t cut it.  Any advisor you are considering should be willing to document their responses to your questions in writing should you need that at some point in time.  Some critical questions include:

• Are you a fiduciary always, and what percentage of your managed assets are under fiduciary care?
• How do you integrate tax strategy with investment management?
• What guaranteed income strategies do you recommend?
• How do you ensure your clients’ portfolios are appropriately risk-managed?

We’ve created a complimentary tool, the “Five Topics to Discuss with Your Financial Advisor.” This guide provides essential questions to ask potential advisors, helping you determine if they meet the criteria of a Level 5 Advisor.

Whether you are nearing retirement or have already retired, this guide can provide you with the knowledge needed to make informed decisions about your financial future.

Final Thoughts

Chris’s mission with the “Retirement for Life” podcast is to educate and empower retirees to make the best financial decisions. By understanding the different levels of financial advisors and asking the right questions, you can get the best possible advice for your unique situation.

Remember, your retirement is too important to leave to chance. Take control of your financial future today by choosing the right advisor who will act in your best interest and help you navigate the complexities of retirement planning.

Connect with us to learn more about our retirement planning services.