Disclosure note: my wife and I have a financial planner who also manages our household investments.
I spend a lot of time writing about investing, retirement and financial planning – obviously. Why would I pay someone to look after all of this when I’m already immersed in it?
Let my answer serve as a reply to a reader who responded to a Carrick on Money callout for basic questions about personal finance and investing. That reader wondered: “Do I need an adviser?”
My own decision to get an adviser was based on these factors:
- I didn’t want to spend personal time on our investments and financial planning – that’s my day job.
- My wife and I were willing to pay for advice, provided it came at a fair price and focused on our financial planning needs rather than on pure portfolio management.
- Our investments were scattered across more than half a dozen accounts at different investment companies, with multiple automatic investing plans; managing all of this is a lot.
- We’re at the life stage where we’ve accumulated significant retirement savings and are thinking ahead about using it for income in the most sustainable and tax-efficient way.
If some of these points resonate, you may need an adviser. But, do advisers need you?
Some advisory companies don’t want small accounts, and those that do may just offer high-fee mutual funds with little planning. A thought for people with small accounts who want advice: hire a financial planner on a flat or hourly rate basis to get a framework for your investing, and then use a low-cost portfolio of exchange-traded funds to build wealth. When you get well into six figures, you could think about graduating to an adviser to provide both financial planning and portfolio management.
If you’re within five to 10 years of retirement, consider buying a consultation with a planner to answer all the questions you have, and I know you have them. There’s no value in finance like getting direct, personalized answers to questions that have been weighing on you.
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Do you have a question or comment for me? Send it my way. Sorry I can’t answer every one personally. Questions and answers are edited for length and clarity.
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