Should you visit with a Financial Adviser or Planner?

Smart people know that sometimes they need to seek out expert opinions – because none of us is an expert in everything. As the person in charge of your finances, you should be willing to consult a financial planner when necessary.

We serve a diverse group of clients at Texas Financial and Retirement and have helped them sort through many unique situations. We know that we’re not the best fit for every situation, and we enjoy helping point people to the best help for their specific problems, even if that’s a different resource.

Here are some situations to think through to help you decide if it makes sense to hire a professional to provide investment and financial advice to you now.

 

If you don’t know whether you have enough to retire …

Many people decide when to retire based on their age, but a better indicator of retirement readiness is how much you’ve saved and will have available to cover the remaining years of your life.

Have you set a target for the total amount of money you’d like to have available to cover your expenses through retirement? Is that amount based on a realistic picture of how much it will cost you to continue to live your desired lifestyle? Is it enough to cover medical expenses, which typically rise as we age? Have you saved at a rate high enough to meet those goals?

If you’re 55 years old or older and don’t know if you have enough to reach your goals, it might be time to visit with a financial adviser.

At this age, you have just 10 years or so remaining to save to meet any gaps. It might be tempting to consider investments which could potentially offer higher returns, but not at the time of life when increased risk should be avoided.

A financial planner can help set reasonable goals, and paint a realistic picture of what to expect from your retirement – as well as what you can feasibly accomplish now to improve that picture.

 

If you’re afraid of the stock market …

You’ve heard about, or know personally, people who lost all or most of their retirement savings in the stock market just before they wanted to retire. This scares you and you wonder if you should just pull all of your savings out of the market right now to avoid the next big crash.

Or perhaps you grew your savings in stocks and bonds through the mutual funds offered by your employer’s 401(k), but you don’t have any faith or trust in the markets. You’re thinking of liquidating what you’ve accumulated and buying some “concrete” things, such as land and buildings you can see and touch, gold and silver you can hold in your hands, etc. Should you see a financial planner first?

Planners are not economists, and they rarely endorse unbalanced investment strategies leaning in any direction. Be honest with yourself: If you want to move most of your assets into real estate or other hard assets, you probably need advice from folks experienced in those areas.

But remember, you can lose money in physical assets just as easily as you can in stocks and bonds.

You ought to be sleeping just fine, if you have and are following a financial plan, are properly diversified, and have the right amount of risk for your current stage of life.

But if you’re worried, it may be time to check on all of that.  If you’re considering a rash move, you should first seek some professional assistance for an objective opinion.

A financial planner can help you make moves to lessen risk at the right times and avoid any unnecessary costs.

 

If you have several retirement accounts but aren’t sure they’re performing the best possible way for you …

You’ve worked a number of different jobs over your career and accumulated a series of retirement accounts along the way. Your spouse is in the same situation. Between the two of you, you’re now the proud owners of a large variety of 401(k), 403(b) and IRA accounts – some of which have performed quite well and others which have been mediocre at best.

A planner can help organize your random and haphazard investment portfolio by analyzing the risks and returns of each part:

  • What’s redundant?
  • What’s missing but important?
  • What’s unnecessary at this particular point in life?
  • What fees and taxes are being incurred – and which could be avoided?

You might get a one-time-only “snapshot,” or analysis of your portfolio, for a few hundred dollars. Or you might want to start receiving an ongoing management service as you near retirement.

 

If you have limited money available to save …

You know you need to save something for your eventual retirement – but you don’t have much to start with, or you’re in your 20s and are just getting started in your career.

You don’t want to make foolish mistakes that will cause you pain down the road. Should you spend the money and time to visit with a professional financial planner?

That might not be your best first step to take. In fact, you should probably start by saving the money you would have spent on a planner to hear something you may already know: Failing to invest your money at all is a certain way to lose in the long run.

Start by enrolling in your company’s 401(k) program and paying down debt to free up money so that you can make more regular and substantial contributions to your savings.

Arrange to have a fixed amount or percent of your paycheck go to retirement. Your HR department can probably help you take care of this in no time at all. Your company’s 401(k) provider may even offer some free financial advice to help you decide how you might want to begin investing your savings. If you still feel you need to speak with someone personally about how to invest your money, you may wish to go ahead and seek some reassurance from a financial planner.

You can find plenty of free guidance from the provider of your company’s 401(k) and other sources online and in print, such as the information we provide here and on our website.

If you find yourself still puzzled or worried,  a one-time visit with a good planner can provide a sounding board and help set benchmark goals to help you make saving a priority.

 

If you’ve received an expected financial windfall …

You’ve suddenly received a lump sum and you’re thinking about purchasing an annuity to generate some ongoing income, or perhaps investing the money elsewhere. Do you really need to see a financial planner first?

An annuity might be a great idea, or it might be a terrible idea for you. It depends on your specific circumstances.

What you need is honest advice that looks at your whole financial picture from a professional perspective.

 

If you have a big dream but aren’t sure you can afford to make it happen …

Maybe you have some big, crazy dream for your life – something you just know you need to be doing as soon as you can get past your current situation. Maybe it’s a life dedicated to some specific charitable work. Maybe it’s starting a business you know is needed. But whatever your crazy dream is, you can’t see how to get the numbers to make sense so you can begin.

You might need to find someone who specializes in “holistic” financial planning or “life planning.” You don’t want someone who only knows bonds and tax planning, but nothing about what you want to do. You need someone who will see your situation as a challenge to be overcome and not a dream to be put off.

 

If you’ve done well, but your extended family is struggling …

You’ve done well, financially, but your friends and family? Not so much.

You want to help them with healthcare expenses, college expenses, etc. – but you don’t want to become their “always open” bank. Do you want to set up your younger relatives for success, but are leary of handing out big financial gifts that could be misused?

Many financial planners will say the situations they deal with are often the result of family problems – divorce, failure of a family-owned business, envious relatives or other things.

To set up appropriate trusts or investment accounts and keep the peace within your family and good relationships with your close friends, you need guidance – a sensitive adviser or team of advisers will be worth the money.

A financial adviser can help create scenarios to ensure money is dispersed when the time is right and set terms that ensure it’s used to the greatest benefit.