Financial Adviser? For Me?
Plan for the future.

Better than a Piggy Bank

I thought October would be a good time to talk about financial planning.  As a daily money manager, this is one of the topics I review with my clients.  I have found that there is a lot of confusion out there about what financial planning involves and what the costs are.  As someone who has worked with a financial adviser for years, I suppose I have my biases, and I am no expert on advising you on different types of investments.  I do, however, have insight into how it works and what the benefits can be.

Many people do not think they have enough money to need a financial planner.  While it is true that many advisers will not be that interested in working with small investment amounts, everyone has to start somewhere.  Make sure you have an emergency fund (3-6 month’s salary) first.  You may find a relative who has a financial adviser that would be willing to take you on as a client, just for the sake of their existing relationship.  If you are truly committed to building wealth, you can find someone who will take you on with $5000 or less.  It may be on an hourly, or project basis.  Ask what size client they serve best.  The range is enormous.  Many investment companies have online, chat-style, or DIY guided investment advice, which can be ok if your investment is low and needs are not complex.  It is best to do your research, and certainly to background check individuals through  If you have questions about the certification designations behind someone’s name, they have the answer to that too:

My experience is that I don’t have the time or the expertise to be a DIY investor.  I want someone who lives and breathes investing to advise me on how to diversify and when to make changes.  If you are a seat-of-the-pants investor, you need to take a good look at how your portfolio has grown vs. stock market key indices.  If you have beat the odds, great!  Maybe you just got lucky, or maybe you are good.  But if not, consider working with a pro.  At the very least, pay for a few hours of time to make sure you are on the right track before you waste 10 years of potential growth.  Even if you have waited a long time to start, it is better to review your options with a professional than to stick your head in the sand and hope you have enough to survive.

There are three basic ways that financial advisers charge for their services:

  1. Loads (commission on trades). This type of fee may apply to only certain types of holdings.  It less common than it used to be.
  2. Assets under management (annual % of assets in portfolio). Typically the percent charges drops with higher value portfolios.  It may be negotiable.  Your adviser’s income will grow and decline as your portfolio does.  (.5 to 2% is typical.)
  3. Hourly or project based fees. Can be a good way to go, particularly if you just need occasional oversight.

A good financial adviser will, over time, generate more income for you than you can make on your own.  Some questions you might ask are:

  • How do you get paid?
  • How long have you been in this business?
  • What made you choose this field?
  • What certifications/advanced degrees do you have?
  • How often do you meet with your clients?

The key factors in growing your education/retirement/healthcare nest egg, are time and rate of return.  The earlier you start the better!  Take a long-term view and don’t panic every time the stock market drops.  Your losses (and gains), are only locked in if you sell.  There are many online calculators that can help you get an idea of how much you need to put aside to meet long term goals. (Just watch out for all the come-ons.)  Obviously, there are market fluctuations and you should never invest money that you truly need in the short term.  In the long term, you will find it hard to even beat inflation without the help of the stock markets and a good adviser.  In my humble opinion.

A big thank you to the advisers who took time to provide input to this article!  Any opinions are my own.  If you are in need of a financial adviser, we can help refer you.  We receive no payment from any advisers for doing so.

Your health and peace of mind are worth every step of this journey.