I’m 57 and will soon have more than $3 million from a business sale. My rich boss trusts his financial adviser, but he inherited his millions. Still, should I try his adviser?

Question: I am 57 years old, have $450,000 saved for retirement and will soon receive $3-$4 million from a business sale as a key employee. I will continue working at $350,000-$550,000 per year with the company even after the sale. I invest the maximum and make catch-up contributions to my 401(k), and my wife is a homemaker so I invest her maximum in a Roth IRA.  I have $100,000 in student loan debt for my kids that I have been paying off and no other debt.

I need a financial planner/advisor to assist and manage my portfolio.  I have read it should be a fee-only fiduciary, but does location matter? My boss and his family have invested with a rep from a big bank for decades and he is happy, but he inherited millions and has not really evaluated the whole picture. I am not sure if that advisor would be a prudent decision. (Looking for a new financial adviser too? This tool can match you to an advisor who may meet your needs.)

Answer: There are a number of issues here — whether to use your bosses’ adviser and if not who to use, the tax and estate implications of the $3-$4 million, the Roth IRA contributions, and more — and we will tackle them one by one. Let’s start with whether to use your bosses’ adviser or someone else. 

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Your boss’ adviser may be great, or he may not — and you’ll want to interview several advisers to get an idea of who you feel comfortable with and trust, and who is an expert in helping people in similar situations to you. (Looking for a new financial adviser too? This tool can match you to an advisor who may meet your needs.)

In general, you want an adviser who is fee-only, because they exclusively earn money through the fee you pay them, not from any sales or commissions on products. This helps to ensure they have your best interests in mind. 

“Many financial advisers are compensated through the sales of financial products, investment commissions or fees, insurance commissions and managed money accounts,” explains certified financial planner David Edmisten at Next Phase Financial Planning in Prescott, Arizona. If the adviser you’re considering “is paid by the sale of a financial product or solutions, you’ll want to understand that upfront so you can determine if that product is the best solution for you. And adds W. Michael Prendergast, certified financial planner at Altfest Personal Wealth Management: “Ask if they’re a fiduciary all the time they interact with you, not just some of the time.”

You’ll also want to ask potential advisers these 15 questions to vet them, and ensure they have experience dealing with the types of issues you have questions about. Some of the things you may be considering are help with financial goals, investments, retirement planning, taxes, risk mitigation, Social Security, Medicare, pensions, deferred compensation, and more. Make sure the adviser has experience in the issues you plan to deal with or are already dealing with. (Looking for a new financial adviser? This tool can match you to an advisor who meets your needs.)

You will also want someone who has experience with taxes (or can work with someone who does) as the business distribution poses an opportunity for tax planning. You’ll need to consider whether the dividends you’re receiving are ordinary or qualified, which determines the rate at which they’re taxed. While some planners specialize in tax planning, it may behoove you to explore working with a certified public accountant (CPA), who’s trained to help reduce taxes.  “We often think of tax planning as an event like filing our annual tax return. Instead, I’d encourage you to think of it as a lifetime journey and pursuit to lower your long-term tax bill,” says certified financial planner Derieck Hodges at Anchor Pointe Wealth.

Furthermore, there are some estate planning and asset protection opportunities to take advantage of, given your situation. “Based on your net worth, I would prioritize a look at an estate plan in which your adviser is in communication with your attorney,” says certified financial planner Joe Favorito at Landmark Wealth Management. And beyond that, “a comprehensive financial planner, not one solely managing investments, will be able to help you identify what your wealth will mean for you, your children and charity if that’s a desire,” says Hodges.  (Looking for a new financial adviser? This tool can match you to an advisor who may meet your needs.)

A couple of things also worth noting is that if your income is between $350,000 and $500,000, you likely aren’t eligible to make a Roth contribution for your wife, as the income limits are based on a joint adjusted gross income, says Favorito. “You can currently circumvent that rule with what’s called a back door conversion. That strategy only works if you don’t have traditional IRAs in the name of the person you are funding the account for. Otherwise, the pro-rate rules on conversions eliminate most of the benefit,” says Favorito.

As for finding an adviser, many firms successfully work with clients around the nation, regardless of their locale, using the benefits of technology. Experts recommend checking out the National Association of Personal Financial Advisors (NAPFA), XY Planning Network and Garrett Planning Network. “Many advisers offer virtual meetings, so the best fit for your citation may not need to be located in your area if you’re comfortable meeting virtually,” says Edmisten.

Questions edited for brevity and clarity.

Have a question about your financial adviser or looking for a new one? Email [email protected].