Roger Wohlner
So far in 2012, I have experienced an increase in the number of inquiries about my services as compared to the past several years through the end of February. Several of my adviser colleagues have had similar experiences. Here are 5 reasons you might consider hiring a financial adviser.
[See top-ranked ETFs by category ranked by U.S. News Best ETFs.]
You have minor children and no written provisions for their care in the event that you and your spouse die. Yesterday, I had a conversation with a 30-something prospective client with an infant daughter. To say I got on my soapbox about his lack of planning in this area is an understatement. I would love to work with him and his wife as clients. Perhaps I scared him off, but even if I did, I hope that he uses the list of names of several local estate planning attorneys that I will be sending him. Sadly, I have more than a few conversations like this in the course of a year. Having a “professional nag” regarding your financial affairs might by itself justify the fees of a financial adviser.
You make your 401(k) choices based on the top-performing plan choices from the prior quarter. As an adviser to both individual clients and retirement plan sponsors, I’ve noticed that money in retirement plans often follows the hot performers. While there are some legitimate momentum-based investment strategies, I’m guessing that this is not behind this behavior. Most people are better served by a long-term strategy that takes their financial goals and outside holdings into account. A qualified financial adviser can facilitate this.
[See 6 Tips for 401(k) Success]
Your “financial goals” are actually vague hopes. A comfortable retirement or the desire to pay for four years of college for your children are admirable aspirations, but they are not goals unless they are quantified and have a time frame attached to them. Further, you will need to track your progress against these goals over time and devise savings and investing strategies to meet these goals. If you can’t do this yourself or don’t want to devote the time, you should consider hiring a financial adviser.
Your investment portfolio is really a collection of accounts and holdings with no rhyme or reason. I call this financial clutter. This can arise for several reasons, but most often it is the lack of a cohesive financial plan or an investment strategy. With people changing jobs many times over a career, it is easy to accumulate a lot of “financial stuff.” A financial adviser can help you sort this out and devise an ongoing financial strategy.
[See Avoiding Retirement Clutter]
You are capable of handling your own finances, but you never get around to it. I have several clients who are intellectually capable of handling their financial planning and investment needs. In some cases they are too busy with their careers and families to focus sufficient attention here. In others they like the idea of an independent view of their situation. In still others this is just not something they enjoy doing. Your financial future is too important to put on the back burner. If you need professional help, get it.
Overall, the decision whether or not to hire a financial adviser should be based on perceived value. Do you feel that the value of the advice will vastly outweigh the adviser’s fees? Be realistic and brutally honest with yourself when answering this question and making this critical decision.
Roger Wohlner, CFP®, is a fee-only financial adviser at Asset Strategy Consultants based in Arlington Heights, Ill., where he provides advice to individual clients, retirement plan sponsors, foundations, and endowments. He recently cofounded Retirement Fiduciary Advisors to provide direct investment and retirement planning advice to 401(k) plan participants. Follow Roger on Twitter and LinkedIn. Roger also blogs at Chicago Financial Planner.
Reader Comments