The theme for this week is: how to pick a financial advisor.

Today, let’s talk about why you might want to consider a financial advisor in the first place. I’m sure many of my beloved listeners are DIY investors, and that’s fine. So let me just spend some time today discussing when using a financial advisor might be a good fit for you.

I find that people generally outsource their financial and investment decisions to a financial advisor for one or more of the following reasons:

1. Time. Managing your money and making smart financial decisions requires time. What is your time worth? Many people find that their time is worth much more than the few hundred or few thousand dollars they pay to their financial advisor each year. Not worrying about staying on top of your retirement portfolio frees you up to spend time on more meaningful and profitable activities.
2. Know-how: Financial planning and investing your money can get complicated, especially as you transition into retirement and aren’t just trying to save enough to maximize the growth. Now we have to protect and continue to grow this nest egg, make decisions about social security, taxes, and estate planning that have massive consequences. So understanding how to make smart investment and retirement planning decisions is critical. This is by far the #1 reason I see smart, capable people outsource their investment management and retirement planning decisions. It’s just complicated and it can be harmful when you don’t know what you don’t know.
3. Nerves of steel. Stock markets are a wild roller coaster. If you watch cable news everyday, you’re bound to think that the world is collapsing any day now. Staying invested when the economy is collapsing requires just a wee bit of ice water flowing through those veins of yours. On the flip side, you’ll need to be cautious and not greedy, so you don’t fall for get-rich-quick schemes or investments that are just too good to be true.

 

So if you have all 3 of these qualities in spades - time, know-how, and nerves of steel - by all means, continue doing it yourself. Just make sure you’re honest with yourself and not being penny wise and pound foolish.

That’s it for today, Thanks for listening!

Tomorrow, come on back, because I’m going to talk about something that very few people understand, yet it’s one of the most important qualities you’ll want to look for in a financial advisor - what is a fiduciary advisor and why you should care.

My name is Ashley Micciche and this is the One Minute Retirement Tip.

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