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Financial Advisors For Seniors: How To Pick The Right Pro

June 18, 2013
5 mins
A senior couple reviews documents with a financial advisor

Canada’s going grey. Each day, 1000 people in our nation turn 65, and this aging demographic is creating a heightened demand for seniors’ financial advice - and scores of financial advisors are looking to capitalize on that growth.

“There’s all these organizations calling themselves specialists, and no doubt some of them have extra thinking around the parameters for retirees' (finances) but there are people getting ripped off,” says Susan Eng, vice president of advocacy for CARP, an organization focused on Canada’s aging population.

Financial advisors for seniors should specialize in addressing unique retirement and savings needs. So, how can you be sure you've found the right pro?

Ending The Earning Phase

For many seniors, the conversation begins with the move from  “accumulation phase to the withdrawal phase,” according to Greg Pollock, president and CEO of Advocis, the Financial Advisors Association of Canada.

“While they will still need financial advice on how to make the most of their retirement nest egg (tax and estate planning advice), moving from the wealth accumulation years to the withdrawal of those assets will have an impact on an advisor’s bottom line – particularly if most of his clients are within that seniors demographic,” says Pollock. “This can be a challenge for advisors from a profitability perspective.”

Longevity Requires More Resources

On the other hand, people are living longer and through more illnesses, which creates opportunity for financial advisors in living benefits insurance real – disability, critical illness and long-term care insurance.

“I would say the two biggest concerns are outliving one’s money and healthcare,” says Pollock. “Two-thirds of Canadians don’t have a workplace pension and the government is putting more of the financial responsibility on individuals.”

And that's where a financial advisor comes in; however, it's important to work with the right professional.

“When looking for an advisor it’s important to look for someone who abides by a code of professional conduct and ethics, who is committed to professional development and someone who is upheld to a high best practices standard,” says Pollock adding that Advocis’ role is promoting accountability among its members.

Be Advised Of These Red Flags

Unsure if a professional has your best interests at heart? There are tell-tale signs that can tip you off.

“The first and most important warning sign is when a so-called ‘advisor’ promises you consistent returns on an investment,” says Pollock. “The reality is that stock markets go up and down – legitimate investment results will vary.”

Another hint you might be dealing with a seedy advisor is if they pressure you to invest beyond your comfort level.

“An ethical and responsible financial advisor will understand your financial goals and objectives but, most importantly, how much money you are willing to risk in any investments,” says Pollock.

Oh, and watch for “special deals” he adds. “Legitimate investment opportunities are generally available to a wide range of clients.”

If you’re searching for an advisor with advanced financial education surrounding the needs of retirees, look for the CLU (Chartered Life Underwriter) designation, which focuses on wealth transfer and estate planning designation.

Advisors with that designation have undergone Advocis’ advanced training surrounding before- and after-retirement and end-of-life planning for seniors and retirees.

Do Your Due Diligence

When picking your financial advisor, your best defense is to do your own research.

“Each investor is his or her own best advocate – consumers should take the necessary steps to research, verify and question the advisor and his recommendations,” adds Pollock. “It comes down to the simple old saying – if it's too good to be true then it probably is.”

Advocis has an online video series about what to look for in a financial advisor, including questions to ask potential advisors, how financial advisors are paid, and warning signs that someone may not have your best interest at heart.  The series can be found on advocis.ca.

Andrew Seale

Andrew Seale is a freelance writer with an absurdly hyperactive mind and predilection towards the obscure and eclectic. He frequently shares his personal finance experiences and mishaps with TheDot readers but has also been known to profile business leaders ranging from financial savants to bootstrapped entrepreneurs. His work has appeared in the Globe and Mail, Yahoo Canada Finance and News, Profit Magazine, The Toronto Star, Enroute Magazine, and on the back of napkins sometimes tucked into the pockets of strangers. He can be found at whenwedrift.contently.com.

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