Do You Need A Retirement Advisor?

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Retirement advisor
Most of us are doing our own retirement planning, a recent survey conducted by Jemstep found.

Jemstep, along with research group Harris Interactive, conducted a survey of 2,309 working-age Americans. It found that only 46% use a financial professional such as a broker or an investment advisor to help them plan for retirement.

More of us, the study found, feel empowered to take our financial future into our own hands, but many American families also feel like they’re at sea, unsure of what professional help they need and equally unsure about how professionals get paid.

Do you need a retirement advisor, and if so, what kind? That may depend more on certain aspects of your personality than anything else.

The DIY Investor

Some of us love heading to Home Depot on a Saturday morning to stock up on materials for a home improvement project. New tiling in the kitchen? No problem! The DIY personality likes to be in charge of things and see the results of his or her creations. This kind of personality may be a natural fit for a go-it-alone approach to retirement planning, which has the additional benefit of avoiding the fees required to retain professional help.

But a seasoned DIY-er knows that a project will not be successful without the right tools, nor without a disciplined approach to seeing the project through to completion. Likewise, a DIY investor needs to know what tools are available to successfully execute the job of retirement planning. The investor needs tools that will help him make three key decisions: portfolio allocation, rebalancing and asset selection.

The Team Manager

Not all of us are DIY types, of course. You may be more inclined to a different personality type – the “team manager.” This is the person who assembles a team of professionals and gives them instructions on how to get the job done.

Are you a team manager? Look around your house – do you have landscapers rearranging the flower beds, plumbers reconfiguring your hot water system, and an interior designer staring at your walls with a furrowed brow, trying to imagine an artistic concept? If so then you’re probably a team manager. So who do you need on your financial team?

The first thing you may want is unbiased advice on how to allocate and construct your portfolio. For this you should know the difference between securities brokers and investment advisors. Advisors (known as RIAs or Registered Investment Advisors) are fiduciaries, meaning that they must act solely in the best interests of their clients. Brokers are normally not fiduciaries, and the advice they provide may be conflicted by other incentives such as commissions. Take this into account when choosing your lead financial professional.

Neither brokers nor investment advisors are normally tax experts, so you may want to add a tax planner to the team. If your affairs are complex enough (e.g. a large estate, charitable endowments or a family office) you probably also need to retain specialized legal counsel. And behind all the activity, of course, you’ll need to designate someone to handle important administrative functions like accounting, recordkeeping and asset custody services.

Whether you’re a DIY investor or a team manager, make sure you have everything you need to put your plan into action. Solid organization will help you create a comfortable and rewarding retirement.

Are you a DIY investor or a team manager? Tell us what you think.

Get practical advice and tools for successful retirement planning, asset allocation and investment selection at

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About the Author

Jemstep’s The Better Investor Blog is created with the goal of helping investors make the best decisions to reach their long-term goals. This blog presents readers with insights and tips from the leading experts in the investment field.


2 thoughts on “Do You Need A Retirement Advisor?

  1. Hi-

    I AM a hybrid. I manage about $300K on my own, and gave an advisor $100K to manage in May of last year. (I picked May as I retired in Jan and it took about that long to roll my 401-K over and get the proper allocations in place).
    The result? Nearly identical (after taking off his fee, and my investment expenses).
    So, i hired him again for 2012 with the same amount of money. After a full 12 months we can better compare results.

  2. Pingback: Is It Dangerous To “Play the Market”? | The Better Investor @Jemstep

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