My recent Smarter Investor post discussed some reasons why you might need professional help managing your finances. Here are five additional reasons why you might consider hiring a financial adviser. The first three reasons are courtesy of friend and fellow financial adviser Bill Howell of Howell Financial Advisors outside of Indianapolis:
You have aging family members who might need help with their finances. This may have several implications, but one involves the scenario where you might be the family member who is designated to help an elderly relative. Besides worrying about your own situation, you are now responsible for ensuring this family member’s finances are handled correctly. This is, of course, in addition to your own financial issues, such as funding retirement and getting your children through college. If you are part of the sandwich generation, a financial adviser can help you balance your financial responsibilities.
You can’t sleep at night worrying about your investments. You couldn’t stand the losses you incurred during the 2008-09 market drop, so you lightened up on equities only to watch the market go off on a three-year bull market run. You’re wondering if now is the time to get back in to a larger extent, but on the other hand you’re worried about another major market drop. A qualified financial adviser can help you determine how you need to invest to achieve your financial goals and still sleep at night.
Your about to retire and don’t know all of the options available for handling your retirement funds. It is one thing to accumulate a nest egg; it is still another to manage that nest egg so it lasts through your retirement years. Which account(s) do you tap first? What are the tax implications? If you are uncomfortable with these issues, hiring a financial adviser might be the answer.
You have several financial types contacting you and don’t know who to listen to. At first blush, it might seem that the last thing you need is another financial adviser. However, a qualified adviser vs. the several financial salespersons who are all telling you to buy their product may be exactly what you need. An unbiased (ideally fee-only) adviser will look at your situation and help you determine how to structure your investments as part of your overall financial plan. From there, your adviser can help you implement these recommendations and steer you into financial products that make sense for you in the overall context of your financial plan.
You keep seeing those TV commercials about “your number” and wonder what your number really is. How much do you need to accumulate to retire in the manner that you’d like to? How much will you need to save? How should you invest? A financial adviser can help you determine where you are, how much you will need, and the steps you need to take to reach your retirement goals.
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. Roger also blogs at Chicago Financial Planner.