It’s not very hard to find a financial adviser to help you prepare for retirement. But finding one you can trust? That can be tough. The first episode of the new Friends Talk Money podcast offers guidance — and a couple of scary stories. (You can listen to it below.)
I’m pleased to say that in this weekly podcast (available on all major streaming platforms and on Friendstalkmoney.org), I’m one of the “Friends.” My two other Friends: syndicated personal finance columnist Terry Savage (author of The Savage Truth on Money; a new edition will be out next month) and Pam Krueger, creator and co-host of public television’s MoneyTrack and founder of Wealthramp.com, a service Next Avenue wrote about which lists vetted, independent fiduciary advisers.
Each episode features the three of us talking about a particular personal finance topic for people 50+, along with one or more experts specializing in it.
The Topic of Episode 1 of ‘Friends Talk Money’
In Episode 1, “Who’s Giving You Financial Advice?” you’ll hear the disturbing story of a Chicago couple who took a financial planning class at a community college. What they didn’t know was that the instructor was an insurance salesman. When the instructor subsequently met with the couple to offer retirement planning advice, he urged them to take $300,000 out of their 401(k) and put it into an annuity he sold. The couple had second thoughts and walked out.
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After Lynne Egan, a Montana securities regulator interviewed for the podcast, heard this story, she decided to go undercover and sign up for a financial planning class at another college. Sure enough, that one was taught by an insurance agent, too.
“He said I was too old to have money in the stock market and told me to buy an equity-indexed annuity,” Egan said. The instructor/agent never asked Egan about her needs or investment objectives.
Savage’s take: “It’s a huge problem.” People who are retiring are searching for help, she said, and “unfortunately, all too many people want to rip them off.”
Find a Fiduciary
All three “Friends,” as well as Egan and the podcast’s other guest, former U.S. Department of Labor Assistant Secretary Phyllis Borzi (a Next Avenue Influencer in Aging), strongly encourage people looking for a retirement-planning adviser to find someone who is a fiduciary.
That’s a term which means the adviser needs to put the client’s interests first.
Borzi was the architect of what was called The Fiduciary Rule, a Labor Department initiative that would’ve required all financial advisers to be fiduciaries. The Trump administration stopped it from taking effect, instituting instead the “Best Interest” rule, requiring broker-dealers recommend financial products in their customer’s best interest.
“Ask a lot of questions before you sign on with an adviser,” Borzi says in the podcast. “Ask: Are you a fiduciary? And if the answer is yes, demand the adviser put it in writing.” Added Krueger: “And get that fiduciary oath in writing on the firm’s letterhead.”
The podcast episode also explains what a Certified Financial Planner is and isn’t and what to do if you hire a financial adviser who you find doesn’t put your interests first.
Topics of future episodes range from long-term care insurance to elder financial fraud to how women can best prepare for retirement. I hope you enjoy listening to them.