With all the ads running for Robo-Advisors you would think a computer and a few ETFs will solve all your needs. If you believe we are all alike, our needs are identical and that the only thing that matters is cost – then maybe.
Financial Advisors are not all created equal. This is an industry where hands on experience servicing investment clients matters. The time, money and commitment to the various designations a Financial Advisor has achieved can go a long way to demonstrate knowledge and experience. Finding a Financial Advisor that meets your needs and has the experience is well worth the cost. It’s no secret that this value is felt by the vast majority of high net worth investors. Most of these people didn’t create their wealth on their own and wouldn’t think of managing their own assets with their lack of knowledge and planning capabilities. Numerous surveys have confirmed over and over again that they see the value in the advice, especially if the Financial Advisor is independent. https://www.investmentexecutive.com/newspaper_/news-newspaper/hnw-clients-favour-independents/
Don’t get me wrong, I believe it’s really important to understand the price you pay, to know exactly what you are getting for your money.
Many full-service Financial Advisors focus on goals and objectives that take time, planning and ongoing coordination for clients to accomplish. If a Financial Advisor is a Certified Financial Planner®, they must meet every requirement of the CFP board. To begin, a candidate must have 6,000 hours of professional experience or 4,000 hours of apprentice experience. The exam process can take up to seven years to complete. The exam spans over two days of testing. Planning is a complex and specialized experience, personalized for the individual.
How many hours of meetings, preparation time and follow-up would it take to appropriately cover all the issues you are currently dealing with and will be facing in your lifetime? Would you trust this to a computer? More importantly, what is the real cost of not instituting an appropriate plan with a true trained and experienced professional? In this regard, we believe that working with a Financial Advisor can add tremendous value beyond the fees paid.
Before you get confused by the potentially lower fees, ask yourself: Is it worth the risk? How would you and your family feel riding in a car knowing all the servicing and repairs were made by using low cost refurbished parts and free labour by someone with no training or experience other than watching a “DIY you-tube video”.
When it comes to delivering value, understanding clients’ needs, planning and helping clients keep more of their after-tax wealth, are just a few of the ways Financial Advisors are able to contribute value. We believe experienced, independent Financial Advisors that are able to educate investors on understanding the solutions and services they receive for the price they pay, have experience working with multiple generations, follow a consistent process, provide unbiased advise, offer custom solutions are likely to add the most value.
If you are retired or near retirement, look for a Financial Advisor that specializes in retirement income planning and works primarily with retirees and near retirees. This type of Financial Advisor would add huge value. Investors today have many options. The challenge is to make the best choice.
So at the end of the day the real question should be – what does it cost me to not work with an experienced Financial Advisor?
