When your relative has money questions
Is Dad asking if he should sell the house now that Mom is gone? Or perhaps Aunt Mary is anxious about her stock investments.
Even if you are good at managing your own money, helping a relative make financial decisions can bring a lot of pressure. Consider hiring a professional to advise you.
- A financial counselor helps with budgeting and projecting expenses into the future. They can also help with setting financial goals, managing debt, understanding credit reports, and getting help from public assistance agencies. They don’t give out investing advice unless they are also licensed as a financial or investment advisor. Low- and middle-income individuals who don’t have investments much beyond their home can benefit from the services of a financial counselor.
- A financial or investment planner recommends strategies for maximum earnings on stock portfolios, gold and other assets.
Ask your friends for the names of financial services specialists they would recommend.
Interview several candidates, in person. Ask about
- experience and education. How long have they been in the advising business? (Aim for at least three years.) What kind of training did they receive?
- typical client. What kinds of clients do they work with routinely? You are looking for someone who specializes in working with older adults.
- payment. Are they paid an hourly fee for services? Or do they get a commission based on selling investments to you? Or perhaps a fee based on how much money they manage for you? Typically, those who take a percentage require a minimum size of account. An hourly-based fee usually indicates a willingness to handle smaller investments.
- certification. Ask about their education and certification credentials.
- Association for Financial Counseling & Planning Education (AFCPE), for general financial counseling.
- National Association of Personal Financial Advisors (NAPFA). These are fee-only investment professionals.
- Certified Financial Planner Board. Certified financial planners often charge based on a percentage of the assets they manage.
- regulatory oversight. For those who handle investments, you want to look up whether there have been any complaints lodged against them:
- the Financial Industry Regulatory Authority (FINRA)
- the S. Securities and Exchange Commission (SEC)
Ask yourself how comfortable you are with the person. Does he or she explain concepts patiently and in terms you can understand? The last thing you want is someone who snows you with jargon and numbers.
Finally, consider having an elderlaw attorney check any recommendations. There may be tax implications. In addition, decisions made now could unknowingly affect eligibility for Medicaid and other long-term care options.
Does your loved one need financial guidance?
As the Metro DC experts in family caregiving, we at Debra Levy Eldercare Associates see many family members doing their best to help an aging loved one with money matters. Because the stakes are so high and some advisors are not always ethical, we highly recommend you do the research and find a licensed professional to help you. Not sure where to turn? Give us a call at 301-593-5285.