Do I Need An Advisor?

Maybe you have handled all your finances up until now. You saved for retirement and now you’re wondering, do I need an advisor? Maybe this is something I don’t want to do by myself anymore. 


Do I Need A Financial Advisor?


The question becomes if I do need an advisor, what kind of advisor do I need? Is it important that they are fiduciary? What about a fee-only advisor? How do I even know who to work with? 


Before we even get into all of that, I want to say that sometimes there is this myth when it comes to financial matters that we think that we should be able to handle everything, know and understand everything, and if we don’t, there’s something wrong with us. That is just a myth. The truth of the matter is we all need help in different areas. 


Even financial advisors need to have a team, no one knows everything.


You probably specialize in something other than financial matters. 


Think about this as it relates to your health. 


In our world today, how many personal trainers are out there to teach you how to exercise? You are aware of different diets for eating. We know that it is important to be healthy and we know the basics of it. But none of us claim to understand it all. That’s why we go to personal trainers. That’s why we do different diet plans. That’s why we go to the doctor. We understand that we need help. 


Financial Advisor Quote - Bertram FinancialSo if we need that help with our health, then it is just as important to have it for our wealth?


I had a personal story come up the other day that relates. One day I decided to rip out all of this white carpet in my living room because who wants white carpet with kids and dogs, right? It was disgusting. I had to get rid of it so I tore it all out and I ordered the vinyl, snap-together floor. I thought, man, it’s just a rectangle room, I can put this down, right? 


I’m trying to put the first row down and I cut off all the little spots where it had to go under the heat vents and around the pipes and I got it all down. And then I’m going on the next row and it feels like I got it together in one spot and it comes out in another spot. After three rows and trying it like three times I give up. 


I cannot understand why my floors aren’t staying together; this should just be easy. I had to call my dad and he came in and showed me how to do it. (apparently, my walls are not completely level!)


With his help, we did the whole living room floor together. But the fact is, while I like to do some things on my own, I can’t do everything. I needed help and it’s OK to ask. 


After my dad and I did that room we actually went out and did another room, but when it came to the bathrooms and all the areas with the more cutting, both of us said, yeah, we’re going to call somebody else to do it because we don’t even want to try to mess with all these little detailed areas. We will bring in a professional.


Do I Need To Work With A Fiduciary?


Just as I brought in someone to help me with the floor, you have to bring somebody in to help you with your financial matters. However, not all advisors are created equal. 


A few years ago they wanted to make it so that we’re all advisor fiduciaries, but that didn’t happen. A fiduciary standard means that I have to act in your best interest.


Now a standard that a lot of advisors operate under now is a suitability standard. They have to do it suitable for you, but what’s suitable for you and what’s best for you can often be two different things.


So, should you work with a fiduciary? Well, you answer that. Do you want someone to do the best for you or someone who has to do something suitable for you? 


Answering that question will determine that. 


How Do I Choose A Financial Advisor?


But coming back from that, when you’re looking at an advisor to work with, I want to give you some practical things that you want to ask. 


I have never ever talked to someone and they’re like, Oh yes, I would be happy with a cookie-cutter approach. Everybody gets the same. No, nobody wants that, right? We all want something that’s unique that’s customized to us that makes sense for us. We get the personal trainer to customize our exercise plan right? 


We know intuitively that what may be right for me might not be right for you, and vice versa. So everyone knows that very often people settle for the cookie-cutter plan. Now, no advisor is going to say, hey, this is the cookie-cutter plan and we do everything the same for everybody. That doesn’t happen. So how do you spot it? 


It comes down to what type of questions are they asking you? 


Just the basics, are you moderate or conservative or aggressive? That’s just like a cookie-cutter approach. Yes, that is something an advisor needs to know, but if that’s where the questions stop then it’s a cookie-cutter approach. It’s not customized to you. In a previous blog on How Will the Election Affect the Market we talked about your personal benchmark and creating that as a tool to judge your performance, so go back and listen to that.


I want to hit a couple of other things that I think are key. When you’re working with an advisor, are they asking you things like, “What do you want?” and not just the what dollar amount.


We kind of cover this with the personal benchmark, but our last first Friday Friday live talks about this in more detail. 


What do you want retirement to look like? What’s important to you? Are you wanting to travel? Maybe it’s important to give things to the kids or grandkids. 


All those things you have to begin with, what’s important to you to create a plan.


I think the most important question is, “How do you know that it’s going to be customized for you?” 


Does it make your goals? Are you able to retire when you want? What type of income is coming in? How much is coming in right? Does it meet all those goals? 


Another key point is to know who you’re working with. Do they answer you in a way that you can understand? 


Very often I think people will answer in a way that makes them look smart or feel smart. But it doesn’t help you understand. I think about that when I’m reading legal documents. Sometimes I can’t understand all the legalese, just give it to me in plain English, right? 


Quote About Financial Advisor - Bertram FinancialSo if you’re working with an advisor and you ask a question and they go on and on and you don’t understand anything that they said then it might not be the right person for you.


They need to be able to explain it to you in a way that you understand. Do you have to understand all the details? No, not if you’re working with an advisor you trust, but should you be able to understand it enough to make you comfortable? Yes.


Third, what are they doing? 


Any advisor that you work with is going to charge fees. It might be an important question to ask how they get paid. I will tell you this little secret. Nobody works for free! 


And nobody works for like you for a $35 maintenance fee. They’re getting paid somewhere. It’s just not always disclosed as much as you like, so I’d ask how they get paid


Also, ask what are they doing for their fee? If someone is managing their money, they should be able to tell you how they’re managing it and what they’re doing for you. 


Are they watching for the downside risk and making sure they manage and protect it? Are they looking out for taxes? Are they creating income for you? What are they doing for the fee that you’re going to be paying them? 


When you have solid answers and you feel comfortable with those questions, that has something personal. They know that what you want is kind of fitting what you need and that’s important. 


Those are some questions to ask, but here’s what’s really key. Any advisor we go to works in one quadrant. That advisor works in the investment positioning quadrant of your financial life. But think about it this way. We have tax planning, we have cash flow, which can be retirement income, we have investment positioning, and we have estate preservation. All areas of your financial life need to be coordinated, is your advisor doing that?


What you do with investment positioning affects every other area. 


To learn more about exactly what I mean, watch our Dream Retirement 101 Webinar and understand how everything is coordinated. As always, if you have any questions, feel free to reach out and schedule a call. Talk to you soon.

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