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New Blog Post... Should You Hire a Retirement Advisor?

by Retirement Rescue Coaching on Nov 20, 2014

Everyone’s telling you that hiring a Retirement advisor is a “must.” In most of the articles you’re reading, the author states that although they offer general advice, it’s always wise to talk to a trusted Retirement advisor for your specific situation.

You’ve heard horror stories from people who’ve gone without an advisor—but you’ve also heard stories from people who’ve managed their Retirement solo and report no problems.

So, what’s the truth? Do you really need a Retirement advisor? What if you feel like you’re doing pretty well with your own personal research and the online advisory tools you’re using?

To help make things a little clearer, let’s take a closer look at why you may want to consider hiring a Retirement advisor, and why you may not.
They Can Save You From Overly Emotional Decisions

It’s easy to get caught up in our feelings about money—our worries, our dreams, our hunches, our worst-case scenarios. But allowing these feelings to dictate our money management decisions can be disastrous.

Having a Retirement advisor on your side can prevent you from making any overly-emotional decisions, like panicking and selling at the bottom of the market or getting “too greedy” when the market is at an all-time high. Retirement advisors are trained to study the facts and figures and analyze the best course of action to take, given your particular needs and goals. They can save you from committing some costly errors in the heat of the moment.
They Provide a Second Opinion

Even if you prefer to use computerized advisory tools, you can still benefit from having an advisor to provide you with a second opinion on any advice you receive from those tools.

An advisor who knows your personal situation and goals can help you analyze the suggestions you’ve been offered in light of what will work best for you. You can still use that online calculator for DIY investing decisions if you prefer; you can simply also get a second opinion from your human advisor.

Which leads to our next point …
Technology Enhances the Relationship

Technology makes it possible for everyone to access high-quality advice, regardless of their asset levels (the size of their portfolio).

In the past, many advisors only wanted to work with high-net-worth individuals, generally defined as investors with liquid portfolios of $1 million or greater. Investors with less than $1 million to invest often couldn’t access the same quality of personalized service and attention.

Fortunately, technology changed that situation. Thanks to online tools, advisors can now decrease their costs (and subsequently, the cost to the average consumer) by delivering basic Retirement advice online. This frees their time so that when they meet face-to-face, they can enjoy higher-value conversations about tougher Retirement decisions.

The result? Most people — including people with smaller portfolios — can now access personalized attention and care, for a fraction of what it used to cost.

In fact, the past trade-off between “DIY investing” vs. using a Retirement advisor may become obsolete. In the future, we may see a melded model, in which software-based services enhance the conversations between investors and advisors. Investors can use technology to gather recommendations, while advisors can help them understand those recommendations — or can serve in other critical capacities, such as facilitating emotionally-charged conversations.

That leads to the next benefit that an advisor offers …
They Can Moderate Tricky Discussions

Talking about money with your loved ones can be uncomfortable and stressful. Whether you need to discuss investment strategies, long-term savings goals or estate planning, it can help to have a trained, impartial third party to facilitate the conversation and interject their professional expertise if things get tricky.
They Help You See the Bigger Picture

Retirement advisors aren’t just valuable when it comes to helping you understand the dollars and cents of your money management plans; they can also help you think about the intersection between your money and your life.

From setting a savings plan that helps you achieve your long- and short-term goals to creating an investment strategy that matches your own personal level of risk-tolerance, an advisor can help you bring your wants and needs into alignment with your Retirement realities—making for a happier you all around.

On the other hand …
You Have to Pay Them

Retirement advisor’s fees can vary widely, but the one thing that’s true across the board is that you will have to factor those fees into your overall expenses. That said, many people find this expense worthwhile because it helps them optimize their Retirement strategy in a way they never could on their own.

It’s similar to hiring a professional mechanic to work on your car; if you’re comfortable replacing those brake pads on your own, then DIY car repair could save you some money. But if you have no idea where to start—or if you just wouldn’t feel 100% safe with your own handiwork—then the added cost of hiring a pro is worth it.

(To make sure you’re getting the most for your money, we recommend choosing a “fee-only” advisor rather than one who receives a percentage of your assets. We also highly recommend ensuring that any advisor you access is a “fiduciary,” which means that they’re required to act in your best interest.)
You Prefer DIY

Some people just prefer to do things on their own. If you feel confident in your Retirement knowledge and your ability to keep emotion out of your decisions, then you don’t have to listen to those people who insist you “must” have a Retirement advisor. It’s your money, and you certainly have that prerogative.

Just make sure your confidence is backed by good results to date; if your track record of Retirement decisions has been spotty, it could be a sign that a little help couldn’t hurt.
So, Should You Hire a Retirement Advisor?

The final answer: Maybe.

If you think you could benefit from having one—or you’re not entirely confident in your own ability to handle your Retirement the best way possible—then by all means, you should get one. But it’s not necessary. You could use online tools like Retirement Rescue Coaching to help you manage your own portfolio – or you could use Retirement Rescue Coaching to guide your conversation with an advisor.


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