Opinion / Politics / Press Releases

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.


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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2 years ago

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.

2 years ago

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.

2 years ago
Reply to  Richard

HI Richard,

Sounds like what you opened was a brokerage account and then let the broker decide what to invest your money in and to also trade the positions as he saw fit. The last two items are a big no-no, as you lose control of your money real fast and open yourself up to potential churning of your account. Lots and lots of red flags, if that was the case and the worst thing you or anyone else should do with any investment accounts. Never invest in anything you don’t understand and never, ever allow anyone but yourself authorize trading decisions on your behalf. He also probably never spent much time explaining why he was putting your money in any of these positions or why they made sense for you and your financial goals. Then he topped it all off by churning your account to generate excess commissions for himself. Hopefully you dumped this bozo before he dI’d too much damage to your funds. A lot of folks tend to just sit back, ask no questions and just watch “advisors” like this oNE just bleed them dry for months on end.

So now it sounds like you’ve gone to the other extreme with what is left. Focusing solely on ultra-safe, low yielding investments to merely preserve princiole. The problem with low yield Treasuries and just sitting on cash is inflation will erode whatever little interest you earn. Buying say a 10 year Treasury with a 3 percent coupon in an annual inflationary environment of 4 to 5 percent, doesn’t generate any positive rate of return, but you will get back whatever principle amount you initially invested. A lot of annunities, as you probably already know from reading through the fine print in the contracts, include annual fees that chew up a moderate amount of the rate of return you receive as well. Still if that is what you are comfortable with, then it is indeed right for you. Best of luck this time around.

ken mcclellan
2 years ago

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 and life goes on day to day. Simple questions by you can not be answered simply, and there’s always other things that might be better or quicker or maybe. You ask something such as; ” I have X amount in my IRA, which is being invested. I am retired. Can I add to it? I also would like to purchase a newer vehicle, can I use that money to do that” ? And simple yes or no never sees the light of day. It’s always if, but, and, maybe, do this, do that, etc., etc. So I’m not surprised about the results of the poll. Afraid might be the wrong word, though.

Thomas J
2 years ago

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.

2 years ago

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.

2 years ago
Reply to  BobA

Yes BobA, you definitely have to screen all the so-called financial advisors you come into contact with. Most are glorified sales reps told to push certain products onto the uniformed. Some, like the one who dealt with, don’t even bother to plug in all the data you’ve provided them, because it wouldn’t help them sell you on the financial products they are trying to put you in.

Gregory Karpicke
2 years ago

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.

2 years ago

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 certain investments to drive sales commissions or sales quotas. So people in need of unbiased financial advice need to do a bit of homework other than relying on friends, family or co-workers. After all, how do you know how much real effort any of them spent in selecting the advisor they are telling you is OK to use? The issue is too important to be left to relying on a casual, brief conversation. You need to do an objective assessment yourself.

That said, the right time to develop long-term financial goals, to ensure a comfortable retirement, is NOT when you are 50 years old or even retired already. That is largely already too late for many people with inadequate financial resources to carrying them through retirement. The time to develop and execute a financial plan is when you are starting out in the work force. As soon as you start receiving your first regular paychecks in your late teens or early 20’s, you should be setting aside whatever percentage you can on a regular basis to execute your investment plan. So you have an effective time frame of 35 or 45 years to build up your financial assets to adequately prepare for retirement.

The importance and means to achieve financial independence is something we should be teaching all our children and grandchildren about from any early age. That is if you don’t want them to end up having to be dependent on a monthly check from the government, that barely provides for a subsistence existence. It’s all about personal choices and decisions at the end of the day.

2 years ago
Reply to  PaulE

PaulE as always your words of wisdom are valued counsel, but there are some of us who only got pensions and buyout lump sums after being downsized out of the work force of major employers late in life, usually in our 50s. And the self employed paying the bills to keep small businesses in existence at all with no other employment options unable to save barely able to keep the doors open. Been there and done that.

2 years ago
Reply to  Richard

Hi Richard,

Before retiring, I both worked for various corporations over the years, as well as owned and managed my own businesses and employees. Yes, most large companies usually begin trimming their over 50 year old workforce via regular layoffs. They usually include enough under 50 year olds to avoid the age discrimination lawsuits. That will never change as companies seek to replace highly skilled, well paid workers with entry level types for a fraction of the price. Even though the entry level types can’t do the job to the same level as more experienced workers. The bean counter mentality runs the corporate world all around the world these days. Again, not going to change, which is why it is even more important to have a personal investment strategy in place at an early age. The advice I gave doesn’t change because of where you worked. It does take discipline to stick to the plan and in the beginning, you will experience some pain as you force yourself to live below your means the first few years. However, the results are well worth it. I decided to retire in my mid 40’s and that was decades years ago, because I my personal investments far exceeded what I calculated would provide for a very comfortable retirement.

The point I was trying to stress is that articles like this one tend to be focused at those people already very close to retirement or already there. Thus if they haven’t already been sticking to a steady and consistent investment plan designed to provide for a comfortable retirement throughout their entire working years, try to catch up starting at 50 years or older is almost guaranteed to fail. Simply not enough time to build up sufficient assets to realistically achieve that retirement goal. You can’t realistically condense 35 to 45 years of compounded investment returns into a 10 to 15 year window. Which is why I emphasized the right time to start saving and investing for retirement is right when you start working for first full time job in your late teens or early 20’s.

The second point I was trying to make is that not everyone who has a title of “financial advisor” is actually a real financial advisor or working for YOUR best interests. The lack of any mention of fiduciary responsibility to the client in the article is a big red flag to me. I’ve met many so-called “financial advisors”, who wanted to manage my assets over the years from banks, insurance companies and brokerages. Fortunately, I knew to ask them a few simple questions that showed 90 percent of them to neither be actual independent financial advisors or working solely in a fiduciary manner. Most were simply sales reps given the title by the company they worked for and many lacked any serious understanding of the financial products they were hawking. Needless to say, I declined to do business with any of them. Which is why I emphasized the need for people to do their own homework and not just rely on recommendations from friends, family or co-workers.

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