aarp-nasaa-consumers

Remember when AARP used to send volunteer monitors into free-meal seminars to identify advisor wrongdoing? That move may not have endeared them to financial scammers. However, advisors with nothing to hide didn’t mind having an AARP “Secret Shopper” in their session. Now the 37 million-member affinity group has rolled out another initiative to protect senior investors: AARP Interview an Advisor TM.

The new program is designed to simplify and take the mystery and guesswork out of the process of interviewing and hiring a financial professional. It provides consumers with a short list of suggested questions about advisor’s qualifications, compensation methods, and standard of care. It also includes an introductory script for consumers to kick off their candidate interviews.

Free and available to AARP members and non-members, the online tool is optimized for mobile use. It also can run on any smartphone, tablet, or computer.

“Many people can benefit from working with a financial professional,” said Joseph P. Borg, NASAA president and director of the Alabama Securities Commission. “But they just don’t know where to start when it comes to selecting one. Interview an Advisor provides guidance on the types of questions to ask an advisor and helps frame the discussion to empower investors in the selection process.”

A key goal of the new tool is to spark a frank discussion about an advisor’s fiduciary or non-fiduciary status. “While registered investment advisors serve as fiduciaries who are required to provide advice that is in their clients’ best interest, many other financial advisors operate under different requirements that obligate them only to make recommendations that are ‘suitable,’” said Jean Setzfand, senior vice president, programs, AARP. “AARP’s new interactive guide will help investors avoid confusion about a financial professional’s standards and qualifications.”

Not only does the tool give consumers a questioning track, it also provides the capability to save advisor responses online for AARP and NASAA research purposes. However, to advisors’ relief, it lacks the ability to enter and save a financial professional’s name and contact information.

Advisors will also be happy to hear that the AARP guide includes only 13 questions, most of which are fairly straightforward.

Still, to make sure you’re not caught short, consider reviewing the AARP question list below and think through your answers in advance.

How many years have you been providing financial planning or investment advisory services? Less than 1 year? 1-5 years? 5 or more years?

What licenses or professional designations do you hold? 

Have you ever been disciplined by a regulator?

What financial services do you provide? (Check all that apply):

  • Comprehensive Financial Planning
  • Tax Planning
  • Mutual Fund Selection
  • Business Planning
  • Tax Preparation
  • Brokerage Services
  • Estate Planning
  • Insurance
  • Investment and Asset Management
  • Retirement Planning
  • Education Funding

What types of investments do you offer to clients? (Check all that apply):

  • Stocks
  • Municipal Securities
  • Futures/Commodities
  • Certificates of Deposit
  • US Government Securities
  • Mutual Funds
  • Limited Partnerships
  • Coins or Other Collectibles
  • Bonds
  • Options
  • Insurance Products
  • Direct Participation Programs
  • Other

How often will you meet with me to review my investments?

Are you limited to offering the investment products offered by the brokerage firm with which you are affiliated?

Are the returns on my investment guaranteed?

How are you compensated? (Check all that apply):

  • Percentage of assets under management
  • Commissions and loads for financial products purchased and sold
  • Salary

Will you break out all of your fees and commissions?

Do you charge for services like duplicate copies of investment statements, postage and handling, or transfer on death fees?

Does your relationship with me falls under a “best interests” or a “suitability” standard?