Professional financial advisors help their clients to develop long-term plans and investment strategies and to weather the highs and lows of the stock market and economy. In fact, according to financial writer Mark Cussen, two studies on the value of using financial advisors supported the view that financial advisors’ coaching and advice can increase earnings.
So, how do you know whether you should move to someone new? Ask yourself questions like: “Am I paying investment fees I don’t understand?”, “Has it been a while since I last reviewed my portfolio with my advisor?”, and “Am I uncertain where to put my money or what to do with an old retirement account from a former employer?”. Depending on your answers, it may be time to explore other options. If the following situations sound familiar, you may need a fresh perspective.
- You have a big change in your life or your finances. This could be anything from a marriage, divorce or new family member to a change in income or an unexpected inheritance. If something throws you a curveball or affects your finances, you’ll need more than the basics. You’ll need help with insurance, estate planning, wealth transfer and tax-related issues, so you’ll need an advisor who has expertise in all these areas.
- You need help diversifying. Keeping the right mix of investments (e.g., stocks, bonds, cash equivalents) can be a challenge, especially across multiple accounts. As time goes by and the market fluctuates, if you become unsure whether your mix of investments will achieve your goals and match your risk tolerance, you should discuss strategies and next steps with a professional you can reach easily.
- Your accounts are scattered. Consolidating brokerage accounts makes it easier to keep track of your overall portfolio. You’ll have only one website to visit, one password to remember or one phone call to make to manage your investments. You can review your portfolio performance in a single snapshot, plan next steps and make it happen all in one conversation with a financial advisor who understands your whole financial picture.
- You’re paying too much in fees. If you have multiple retirement and investment accounts, you’re probably paying multiple fees and expenses for account management, operating expenses, administrative fees and more. Your advisor should let you know that bringing your accounts together could help streamline some of your fees.
- You have a 401(k) or other employer-sponsored retirement plan from a previous job. It’s easy to forget about the money in your old retirement plan when you transition to a new job. But, it’s important to make sure your retirement money stays in your control and to carefully consider your options. Will you keep the money where it is, roll it over to an IRA or your new employer’s plan, or cash it out? You’ll need to understand what each option will mean to your finances, because making a wrong move like taking a lump sum before retirement or failing to properly roll over the balance into a qualified retirement account could be costly. If you’re not sure what to do or how your long-term needs will be affected, you need a financial advisor you can trust who can explain all your options and help you make an informed decision about consolidating retirement accounts.
- You’re not sure what to do next. Do you have multiple goals and priorities? Maybe you’re juggling paying off debt, saving for a down payment on a house or a child’s college education, and investing for your retirement. If you’re not sure where you should focus or how you can accomplish all your goals, you should be able to meet regularly with your advisor to take an objective look at your complete financial picture and adjust your plan as your situation changes.
Switching financial advisors is easy. You generally need only your most recent statement, and the new advisor can take care of the rest. If you need help with some of these big life decisions, our licensed financial advisors with Navy Federal Financial Group can help.