Does my situation warrant the detail and expertise of a pro?
If this is still an open question, here’s some good rules of thumb and rationale to consider as you decide what’s right for you:
If you are fortunate to be in the high net worth range (Portfolio $1 million to $20 million; net worth (including housing, business and real estate investment assets, etc.) $3 million to $25 million net worth) or ultra-high net worth range (Portfolio $20 million+ and all-in net worth $25 million to $200 million), you definitely have enough needs, opportunities and complexities to seriously consider working with a professional advisor.
Just remember the two golden rules: 1) 100% fiduciary (has to do what is in your best interest 100% of the time (not a no-time or part-time fiduciary, such as a stock broker or insurance agent) and 2) absolutely fee-only (absolutely no commissions earned selling you anything).
Then, in a second wave of review, consider the competence and table-side manner of the entire professional team you’d be working with. Evaluate the competence, poise and table-side manner of the entire team you are considering (hiring an advisor no-longer means a single person, it means the entire team supporting you (investment, financial, retirement and operations team members). Look for the CFA, CFP, ChFC, CAIA, FPQP, AAMS, AWMA credentials within the team.
Last, but not least. Consider the system, structure, support, efficiencies, scale and disciplines built into the advisor’s platform and solutions. You should see great evidence of attention to detail, yet a solution that simplifies the complex into the clarity, direction, confidence and long-time solution you want and need.
Complexities fall into many categories, beginning with the technical:
- The investment markets (including fundamental analysis and technical analysis on equity, fixed income and alternative sides),
- income tax code,
- estate tax code,
- personal finance and
- global economy, including destructive tensions (dangers), creative forces (opportunities) and strengths.
So are the nuances of certain rules and regulations around assets like:
- stock options,
- restricted stocks,
- insider trading,
- trusts and
- business entities (LLCs, C-Corp, S-Corp, etc.).
Then there’s the complexities and nuances around life-changing liquidity events like:
- retirement (living off of working assets),
- selling a business,
- executing stock options,
- receiving an inheritance.
Then there are complexities around relationships and life-events:
- business/career leaps and setbacks,
- disabilities and other health concerns and
- surviving spouse.
Then there’s the complexities – some times – around other natural but powerful forces, such as:
- goals and aspirations,
- blind spots,
- habits, and
Properly trained and experienced advisors who deal with these complexities all the time can be more equipped and trained to spot them, understand them and harness them with the advantage of knowledge, experience and a perspective one managing money in isolation likely cannot. These are all good reasons to consider a quality professional advisor.
Your unique life, financial history and desired future all require a custom roadmap truly built around you and for you. You have unique values, goals, relationships, interests and circumstances that deserve a custom, not a cookie cutter approach.
A good reason to work with an advisor, particularly an advisor whose way of operating is naturally in a tailored way, is to custom design your game plan around you. This doesn’t mean that you or the advisor does not take advantage of efficiencies and scales of economy where they fit. It does mean that your unique circumstances play an integral role in the decision-making process. It’s an important reason to work with a professional advisor.
Even though automation is making it faster, easier and cheaper to do many tasks in personal finance, it still takes quite a bit of time to do it right. Just the time, effort and investment to stay up with automation, markets and economy, is more than most want or can to do on their own. Then add to this the technical talent and abilities needed along with the access to the right tools, information, research and perspective advantages to make sound decisions. For many, beyond expertise, time is the second biggest reason to delegate most of the details to a professional advisory team.
Firms like ours spend far more on talent, tools and research than any one client pays in fees. Sacrificing your time and sacrificing the tools, talent, research and perspective advantages you have helping you make decisions and execute on them in a timely manner is not a wise trade-off for most, in our humble opinion.
The only exception we could even see as a possibility is for those with investment portfolios under $1 million getting their feet wet with an automated solution and platform like that offered at FlourishWorldwide.com, which we helped develop and have a related business interest in*. It teaches all the basics and automates a lot of the details up to the point where the size, complexity, customization need and ability to hire competent pros allows for the upgrade to a professional advisor.
Wealth creation, wealth accumulation and wealth optimization all take discipline in order to master. There are daily, weekly, monthly, quarterly and annual disciplines. Many of the people we work with have been fortunate to figure out some of the disciplines of wealth creation and wealth accumulation. Wealth optimization disciplines, putting your hard-earned money to work, so you don’t have to, are in a whole new realm of disciplines and juggling them along with wealth creation and accumulation disciplines simply is not desirable or possible. Hire an advisor so you can focus on what you do best, are most fascinated, interested and able to do.
Lastly, an all-important multiplier in the world is to not focus on HOW to do things, but to surround oneself with that right WHO’s and let them take care of the many HOWS according to their talents and abilities. We are strong advocates of this philosophy. Even for those of us who can learn how to do quite a bit, this model is limited. Those who surround themselves with the right WHO’s can gain capabilities faster, easier and better and achieve and multiply results at much faster clips than those stuck in the How model. This is a great reason to decide to work with a professional financial advisor.