Op-ed: The pandemic has shown that long-term financial security is a necessity, not a luxury

As of mid-September, there were 26.5 million Americans on some form of unemployment assistance.  Many families and individuals have been forced to deal with unexpected health costs and uncertain education and day care situations in their communities.

Many Americans are facing a grave threat of financial insecurity, having lost either their employment or income, or both.

The tragic situation facing many Americans holds an important financial lesson. The Covid-19 pandemic has shown us that long-term financial security is a necessity, not a luxury. And that means competent and ethical financial planning must be a priority.

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When the financial markets plummeted in March and early April, some financial planners began to see an increase in demand for their advice. An April survey conducted by Nationwide found that 1 in 4 Americans surveyed had sought the help of a financial advisor for the first time ever due to the pandemic’s impact. And 64% of advisors surveyed by CFP Board in April said they believe that more Americans will seek professional financial advice in the wake of Covid-19.

With the continuing economic uncertainty, now is the time to focus on how best to maneuver through the financial ups, downs and sometimes sideways paths that today’s changing economics take on your financial goals.

Planning a financial future is a dynamic process. Shifts in your financial circumstance or lifestyle adjustments such as a career change, marriage, college costs or a house purchase affect your financial situation. As you begin to consider how best to manage your financial future, you can look to financial professionals to guide you.

There is a misconception that you need to have a lot of money to work with an advisor on developing a financial plan. This simply is not the case. There are financial planners with varying business models intended to accommodate investors of all wealth levels. However, you need to be willing to do the work to find the best financial professional for you and your situation.

To be sure, financial planners are not all the same.

Some work for larger financial firms, some for smaller financial firms, and others are independent financial planners. But you should feel confident and trust your financial planner as being competent, ethical and committed to putting your interests above theirs in the process — in other words, that they are operating as a fiduciary.

A fiduciary is a financial planner who commits to act in your best interest and listens to your decisions. As part of their certification, certified financial planners make a commitment to act as a fiduciary and, therefore, in the best interests of the client, when providing financial advice.

Here are some points to consider when searching to find that right financial advisor.

Ask about the credentials the advisor holds, their financial planning experience, and learn how he or she stays up to date with changes and developments in the financial planning field.

Also, what services do they offer, and will they be the only advisor working with you? While some financial advisors work with clients directly, and others work with a team, ask who will handle your account, and ask whether the advisor works with professionals outside their own practice.

How will you pay for the advisor’s services? You can pay for financial advice in several ways. Fees are based on a percentage of the investable assets the financial advisor manages for you. Commissions are charged on the products the advisor sells. Some advisors charge annual or monthly fees for clients who don’t have assets to manage.

Ask this question: Do others stand to gain from the financial advice you give me?

Ask the advisor to describe any potential conflicts of interest. For example, advisors who sell insurance policies, securities or mutual funds may have a business relationship with the companies that provide these products.

Find out how much the advisor typically charges. The advisor should provide you with an estimate of possible charges based on the services that will be utilized and any products that will be used to implement your plan.

Ask the advisor if they have you ever been publicly disciplined for unethical or unlawful actions in their career. Investors can find disciplinary history information about financial advisors through the Financial Industry Regulatory Authority’s BrokerCheck site, CFP Board’s Verify tool and the SEC’s Investment Adviser Public Disclosure databases.

As we continue to navigate the economic impact of this pandemic, taking the time to find the right financial planner will help you prepare yourself for any market condition and make progress toward your financial goals.