Wealth Column: Have you outgrown your financial adviser?

Choosing a financial adviser for either investment skill or financial planning capabilities may not be enough.

Bruce Helmer and Peg Webb sit next to each other at a table.
Bruce Helmer and Peg Webb, financial advisers at Wealth Enhancement Group and co-hosts of “Your Money” on KLKS 100.1 FM on Sunday mornings.

Many investors have turned to a financial professional for help when navigating economic uncertainty in addition to wanting to build a portfolio that will withstand market shocks and generate sustainable income in retirement.

Choosing a financial adviser for either investment skill or financial planning capabilities may not be enough. You need to work with someone you not only know, like and trust to keep your best interests at heart, but also someone who can handle all the myriad aspects of managing your family’s wealth as your needs inevitably change over time.

It’s possible that the adviser who has brought you this far may not be the best choice to take you to the next level. They may not be equipped to advise you on the broader and more complex issues associated with managing your financial affairs. In this article we share a few thoughts on why your current adviser may not be equipped to help you manage the next phase of your financial journey.

How financial advisers add value

People usually decide to hire a financial adviser when they settle into a career, start a family or experience some other major life event. With busy lives, many find they don’t have the time or inclination to manage their finances themselves. Financial advisers have the training and experience to help put your financial situation on solid footing.

It’s not all about investment returns. The greatest value that an adviser can add is in seven areas of financial planning:


  1. Cash management

You shouldn’t be investing in earnest until you’re confident you can stick to a monthly budget and manage debt. A good adviser will help you construct a manageable budget, let you know when your spending exceeds your means, and advise you when you need to dial it back. An adviser who ignores this aspect of your financial life probably does not have your best interest at heart.

  1. Investment access

Larger advisery firms may be able to offer you investment options at a lower cost than you might get on your own, as well as access to highly rated, hard-to-access managers that may be closed to new investors. If your adviser has you in the most expensive share class or in funds that consistently underperform the market, it may be time to consider a change.

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  1. Asset allocation strategy

A capable adviser should create an asset allocation strategy tailored to your individual goals and risk tolerance. You receive the most value from an asset allocation strategy from an adviser who continually monitors your account and manages any (hopefully small) future adjustments to keep that allocation strategy on target. This can save you valuable time and give you peace of mind. If your adviser never recommends any changes to your portfolio, especially in volatile markets, that could be a red flag that they are focused on other aspects of their business.

  1. Retirement planning

Many investors don’t understand the different ways that various retirement-focused accounts can be used in income planning: 401(k)/403(b), traditional IRA, Roth IRA, income ladders, annuities or taxable accounts. When an adviser helps you diversify your tax exposure , you may be better positioned to make your money last longer in retirement.

  1. Asset protection

Once you have accumulated financial and other types of assets, you need to protect them from loss. An adviser can help you purchase various types of insurance, including property and casualty (P&C), life, liability/umbrella, and special policies or riders to cover valuable art or collectibles.

  1. Cohesive tax strategy

Likely half of the tax returns we review each year show that taxpayers don’t claim the correct amount for Qualified Charitable Deductions (QCDs), especially if they are paying them directly out of an IRA. Many don’t understand the different tax treatments that apply to 401(k), traditional or Roth IRAs or taxable accounts — or how to diversify their tax exposure. A forward-thinking adviser will help you decide when to take Social Security benefits or required minimum distributions (RMDs) — which can be surprisingly complicated, depending on your situation.

  1. Estate and gift planning

A full service advisery firm should be able to quarterback the creation of your estate planning and gifting strategy — with input from your attorney and tax professional. This includes the creation of trusts to pass your wealth efficiently to future generations, or to distribute gifts of cash or securities to your loved ones or favorite causes in a tax-smart way.


How to choose an adviser

If you’ve decided that you want to change advisers, how should you move forward? We think you should interview two or three candidates. If you know a trusted friend or family member uses an adviser and has had a good experience, ask for a referral. As part of your research, you should evaluate each candidate using these criteria:

  • Can you have a conversation with this person? Do they listen to you? Did they seem to care about you?
  • What is the adviser’s experience and expertise? Has she been through at least one recession? Does she focus on one specialty, such as retirement planning, or is she more of a generalist? 
  • What is their training and credentials? Are they a certified financial planner, certified financial analyst or certified public accountant?  
  • Finally, pay attention to how the adviser is paid. While a registered representative and a registered investment adviser are both legally bound to work in your best interest, the way they are compensated will tell you a lot about where their monetary allegiances may lie. It always is a good idea to conduct a background check through the Financial Industry Regulatory Authority, Securities and Exchange Commission, or Certified Financial Planner Board websites. 

A great adviser should be able to demonstrate their value many times over in a number of areas of your financial life. If you are not seeing that value in your advisory relationship, it could be time to move on.
To learn more, please download our recent eBook, 7 Things Your adviser May Not Be Telling You , available on the Insights page of our website, .

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Bruce Helmer and Peg Webb are financial advisers at Wealth Enhancement Group and co-hosts of “Your Money” on News Radio 830 WCCO on Sunday mornings. Email Bruce and Peg at Securities offered through LPL Financial, Member FINRA/SIPC. Advisory services offered through Wealth Enhancement Advisory Services, LLC, a registered investment adviser. Wealth Enhancement Group and Wealth Enhancement Advisory Services are separate entities from LPL.

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