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Polls Show Most Adults Are Afraid to Talk With a Financial Advisor; Don’t Be, Says AMAC

financial advisor afraid adultsWASHINGTON, DC – Not long ago a Harris poll revealed that most people were afraid of talking to a financial advisor.  The survey was conducted in behalf of the Philadelphia based McAdam financial advisory firm and showed that 71% of Americans were afraid to talk with a financial advisor.  Nearly half of them said that they thought it would wind up costing them “a lot of money.”

Dan Weber, president of the Association of Mature American Citizens [AMAC] who has a background in financial services, says that there are savvy seniors who have the know how to productively manage their finances.  He notes that an estimated 25% of investors act as their own money managers.

But, there are many more adults, young and old, who could use advice.  “In fact, numerous studies have been conducted over recent years and they all show that most of the population doesn’t have sufficient assets to allow them to retire in a reasonably comfortable manner. The Northwestern Mutual Life Insurance Company issued a report just a few months ago showing that two-thirds of U.S. adults in their 60s have less than $25,000 in retirement savings.”

Too many people who need help with their finances think it is not proper to be discussing money with a stranger, even if he or she is a professional advisor or planner.  Others are afraid that no amount of financial advice will help them acquire enough retirement savings.

“They’re wrong on both counts,” according to Weber.  He suggests that individuals should take the time and get objective, professional advice on how to manage financial routines, incomes and assets when significant events occur in their lives—events such as marriage, starting a family, getting a new job and, of course, planning for retirement.

Bear in mind that there is no income threshold when it comes to getting the services of a financial consultant.  If you have any questions at all about how to allocate your salary, your savings or your assets, it means that you have sufficient resources to engage an advisor.

John Caffrey, principal at Castle Asset Management, LLC, says that there are no specific asset minimums or income minimums.  “It’s not about minimums.  It is about positioning a client based on his or her personal resources in a manner that will best serve their needs and achieve their goals.  A good financial advisor will understand the client’s situation and expectations and make recommendations accordingly.  One client may have a smaller asset base than another, but they both have a need to know how best to employ what they do have in a manner that will provide them with a maximum return.  Even a modest 401(k) or IRA needs good, knowledgeable management.”

One of the most important questions to ask when seeking a reputable advisor is, of course, how much will he or she charge for services and will it be worth the cost.  According to David Weliver, a founding editor of the Web site Money Under 30, explains that “most fee-only financial planners will charge between $1,000 and $2,000 for a comprehensive financial plan.  For ongoing advice, you could expect to pay a monthly retainer of a couple hundred dollars.”

So, how do you go about identifying an advisor who will be right for you?  The first thing you need to do is put together a list of potential candidates, not by picking names at random out of the Yellow Pages, but by asking friends, family and workmates for recommendations.  You may also ask your accountant, your attorney, your insurance and/or your investment broker.

The ideal advisor or planner is one who is independent and who will provide objective advice for a reasonable fee, based on your income, savings, investment levels and other assets.

AMAC’s Weber says that a suitable financial consultant will have a suitable college degree.  And, he or she should also have appropriate professional credentials?  There are several designations that a financial planner or advisor might have such as CFP [Certified Financial Planner], ChfC [Chartered Financial Consultant] or CLU [Chartered Life Underwriter].  Meanwhile, to complete your homework it is advised that you check up on your candidates by doing some research.  For example, the Designation Check Web site provides you with an easy way to vet a financial consultant by name and zip code.

ABOUT AMAC

The Association of Mature American Citizens [AMAC] [https://www.amac.us] is a vibrant, vital senior advocacy organization that takes its marching orders from its members.  We act and speak on their behalf, protecting their interests and offering a practical insight on how to best solve the problems they face today.  Live long and make a difference by joining us today at https://amac.us/join-amac.

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PaulE

While I would definitely agree that most people, who lack either the knowledge and ability to manage and grow their financial assets well or simply lack any interest in doing so on an ongoing basis, would benefit from sitting down with a Certified Financial Planner (CFP) and assessing one’s goals and developing a roadmap on how to achieve them, there is no mention in the article of seeking out advice from only CFP’s adhering to the fiduciary standard. Advisors only working for the well being and benefit of the client. As opposed to the benefit of either the bank, insurance company or brokerage house where the advisor works. Even the advisor himself / herself employed by such companies, who may simply be masquerading as a “financial advisor”, but is actually nothing more than a sales rep given a title and instructions by the company to push a laundry list of… Read more »

BobA

When I retired one of the benefits the company provided was a session with a financial adviser. After taking all of our info we went back for his advice. He had fancy graphs and charts that showed we would be broke within 10 years of my retiring. My wife went into panic mode while I looked over his charts. He was in the middle of his sales pitch pushing his products, as she was listening intently and nodding her head in agreement, and I said, you need to go back to the drawing board friend, you don’t have half of our income included in your numbers or the fact that our mortgage would paid off in 6 months. Needless to say, we didn’t go back. I now have one who is more interested in us than selling his products.

Thomas J

Asking them if the act as a fiduciary is also important or they could make recommendations based on their commissions instead of what is best for you.

Gregory Karpicke

I see no mention of fiduciary responsibilities nor any mention of RIAs that must adhere to the fiduciary rule. That makes this article about contacting a CFP suspect.

Kenny

An often overlooked option is the low cost index fund. Its fees are typically less than 1/4 that of the typical managed account. It will have it’s ups and downs but over the course of time yields incredible returns. I would recommend reading J.L. Collins’ book The Simple Path to Wealth, and The Automatic Millionaire by David Bach. Everyone has differing circumstances so you will need to find the path that is right for you. Part of finding that “right” path is knowing what options are available. In today’s consumer driven society, you may have to choose between your financial security and buying the latest trendy gadget. To me the choice was clear, get out of my indentured servitude to material possessions in order to have financial freedom. Good fortune to all of you working to find financial peace of mind.

Richard

Many of us have been turned off by losses like the Crash in 2007-2008, and our advisors admonishments to “stay the course” and “hold steady for the long term” while our accounts bled out but their commissions and fees were still paid. Then to add insult to injury, “Your portfolio has declined because the peace treaty in Africa caused the handgrenade factory in Eastern Europe owned by the chemical company you are invested in to close” or “That newly discovered cure for certain cancers has wiped out your positions in pharmarcetucials, because that company we recommemded which supplied chemotherapy poisins are no longer needed.” So take refuge in something like Treasuries or an annuity, but be careful there are hundreds to choose from and not all are suitable for everyone. And you can always hold cash and/or precious metals.

ken mcclellan

Sure, you sit there and try to follow along. But being lost and not understanding is intimidating. You say, ” here’s what I have, here’s what I spend, this is what I’d like, what should I do”? That’s not how it works. You’ll be told to invest in this and that and some are riskier than others and some take time to show a return but could also lose everything. And you get charged for that and charged to keep an eye on whatever decision is made. And who knows if that charge is on top of the one to manage the retirement account. So you go away frustrated and hopeful the person managing your funds isn’t incompetent nor dishonest. Reams and reams of reports and paperwork come every month and you aren’t sure what they all mean, but your totals seem to be alright, so they are filed away… Read more »