When it comes to achieving your dreams and investing in your legacy, there are a host of options that may seem daunting or time consuming. How do you balance market risk with your time horizon? How do you keep inflation from eating away at your savings? How about leveraging compound interest so you have adequate retirement income?
These are the questions we are faced with when we attempt to plan for retirement, someone in need or a special financial goal. Some may try to go it alone, but professional advice could be the secret to your success. However, finding someone who has your best interest in mind may not always be so easy.
Paying for Financial Advice
Have you wondered if it’s worth it to pay for a financial advisor? Maybe you have heard of a free or automated robot advisor (aka robo-advisor)? Or, perhaps you thought you could do just as well on your own. You probably have also heard you get what you pay for.
We agree saving money and getting a good deal can be helpful and even exciting! But, have you also considered the value and overall results from each of these options? Would you feel more confident in having at least some actively engaged and personalized human oversight for a small fee versus leaving your finances solely to a cookie-cutter automated robo-advisor or type of quality that comes from a free service? (For related reading, see: Pros and Cons of Using a Robo-Advisor.)
You may be interested in the modern technology many quality robo advisors operate on, which can be advantageous to functions like automatic rebalancing, tax-loss harvesting and custom goals or allocation recommendations based on your input. Some firms now offer a hybrid option of incorporating this technology with the experience and intuition of an experienced human advisor.
As you may know, some advisors may receive a commission or sales charge that can create a bias toward a particular investment or insurance option. These products may be driven by a quota or restricted to limited products based on company policies motivated by high profits. Be wary of these types of advisors!
Fee-Based Financial Advisors
You are usually better off to seek an advisor with fee-based or asset-based compensation to support making unbiased recommendations better suited to your individual goals and circumstances. Trustworthy advisors should not hesitate to disclose their fees and have a heart of a teacher or a coach.
While you should always be willing to learn, there can be multiple pitfalls from apparently simple actions. A human advisor can help provide guidance or a second opinion on various options or strategies while considering your overall financial plan and goals. A robo-advisor may have some standard pre-set options, but you might want to get them double-checked based on your unique circumstance.
If you agree working with an experienced human advisor could provide a better return, or save you time and frustration for a small fee rather than doing it all yourself, would that be worth your peace of mind? Having a financial advisor who is both competent and truly cares can mean the difference in achieving or not achieving your goals. From providing a college education for a child or grandchild to generating income for retirement or someone in need, a financial advisor can help invest in your legacy.
(For more from this author, see: Take These 8 Key Steps to Financial Success.)