Benefits Of Hiring A Financial Advisor

08/31/22 • 5 min

The theme this week on the Retirement Quick Tips Podcast is: When Should I Hire A Financial Advisor?

Today, I’m talking about some of the key benefits of hiring a financial advisor. It’s hard to know what exactly you’re getting when you’re paying for the services of a financial advisor as there’s not always a deliverable at the end.

At least when you hire an attorney or a CPA, you get a trust or other estate planning documents at the end of it or your tax return is filed.

But when you hire a financial advisor, most of the time you’re hiring someone to manage your investments, and help you with ongoing financial and retirement planning decisions. Quantifying that advice and weighing it against the cost can be fuzzy at best.

To help quantify the value of financial advise to weigh against the ongoing cost of hiring an advisor, Vanguard does an annual study that looks at different services advisors provide and quantifies the value of each.

In short, here are the key areas where an advisor provides the most value:

Suitable asset allocation using broadly diversified funds/ETFs
Cost-effective implementation (expense ratios)
Rebalancing
Behavioral coaching
Asset location
Spending strategy (withdrawal order)
Total return versus income investing

The total estimated annual value of these key areas is around 3% in increased returns per year.

So if your advisor is charging a 1% fee on your total assets to manage your investments and provide financial advice, the benefit outweighs the cost 3 to 1.

The key though is finding a proactive, sharp, and qualified advisor who will actually do these things and do them well.

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast.

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>>> Subscribe on Apple Podcasts: https://apple.co/2DI2LSP

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Visit the podcast page: https://truenorthra.com/podcast/

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

The theme this week on the Retirement Quick Tips Podcast is: When Should I Hire A Financial Advisor?

At least when you hire an attorney or a CPA, you get a trust or other estate planning documents at the end of it or your tax return is filed.

In short, here are the key areas where an advisor provides the most value:

Suitable asset allocation using broadly diversified funds/ETFs
Cost-effective implementation (expense ratios)
Rebalancing
Behavioral coaching
Asset location
Spending strategy (withdrawal order)
Total return versus income investing

The total estimated annual value of these key areas is around 3% in increased returns per year.

So if your advisor is charging a 1% fee on your total assets to manage your investments and provide financial advice, the benefit outweighs the cost 3 to 1.

The key though is finding a proactive, sharp, and qualified advisor who will actually do these things and do them well.

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast.

----------

>>> Subscribe on Apple Podcasts: https://apple.co/2DI2LSP

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Visit the podcast page: https://truenorthra.com/podcast/

----------

Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

Previous Episode

Hiring A Financial Advisor vs. DIY

The theme this week on the Retirement Quick Tips Podcast is: When Should I Hire A Financial Advisor?

Today, I’m talking about when you may want to consider hiring a financial advisor vs. DIY.

It’s probably easiest to tackle this decision from the standpoint of when to DIY. I think it’s fine for most people starting out in their 20s, 30s, and even in your 40s to go it alone. That doesn’t mean you’ll want to blindly make financial or investment decisions without researching and asking for help.

Most people in their 20s, 30s, and 40s would be 80% of the way to financial success by following just a few key pieces of advice:

Live below your means
Save as much as you can for retirement as early and as consistently as you can
Get out and stay out of debt
Make sure your investment portfolio is invested in stocks and well-diversified

There is usually an older, experienced, and helpful parent or other relative or family friend who you can lean on for more complicated decisions and advice, so many people who develop good financial habits early, and make well researched and informed decisions don’t necessarily need to hire professional help.

On the other hand, the most common reason I see a potential client come through the door who was previously a DIY investor is because they’re approaching retirement and they have some type of triggering event.

This could be an inheritance or an upcoming retirement. I’ll talk about more of these triggering events later in the week, but navigating the maze of irreversible and potentially costly decisions that one makes later in life as you approach and enter retirement requires more careful planning and decision-making, and that’s where a competent and experienced financial advisor can provide significant benefits that far outweigh their cost.

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast.

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>>> Subscribe on Apple Podcasts: https://apple.co/2DI2LSP

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Visit the podcast page: https://truenorthra.com/podcast/

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance