Working with a Financial Advisor

Estate planning attorneys frequently work with clients’ financial advisors.  Advisors may distinguish themselves, sometimes by certifications, sometimes by the products they offer, sometimes by the way they structure fees, and sometimes by the demographic they serve.  There are many financial advisors available, and it can be a real challenge to determine which one would be best.  One place to start is with which type of financial advisory services is needed, and then select an advisor who focuses the practice on that area.  The best financial advisors are those who tailor their services directly to their clients.  And, as in many fields, a referral from a satisfied client can be the most productive lead to a good financial advisor.

 From a getting-started perspective, an advisor who is responsive to a client or potential client’s calls is a very good indicator.  However, it is important that the client defines what he wants from a financial advisor, be that help in establishing a budget, maximizing savings, managing assets for a goal, defining one or more goals, preparing for retirement, managing assets in retirement, managing trust assets, rebalancing portfolios, managing accounts for tax efficiency, among the many objectives.

 For many potential clients, the considerations in selecting an advisor include age and stage of life, income level, comfort with having someone else manage your money, need for assistance.  Working with a financial advisor can range from a one-time consultation to get a professional’s review of your own plan, to a continuing relationship with a financial advisor who manages all of your assets.

There are financial advisors who specialize in retirement income and tax planning; if you are a recent college graduate, that advisor might not be the right choice, no matter how good the rate of return on the investment portfolio.   Many financial columnists, in newspapers, newsletters and magazines, focus on maximizing savings for major purchases, college costs, and of course, retirement, and offer strategies on how to cut expenses to make more money available for savings.  Assistance or directions in deciding where the savings should be invested is a key reason for going with a financial advisor. 

For someone in retirement, or facing the need to begin Required Minimum Distributions (RMDs) from tax-deferred retirement accounts, the question may not be how to save more, but where to begin spending.  With an estimated $4.6 trillion in defined contribution retirement plans (as of 2011), an increasing number of retirees will need to decide where to draw funds to meet their expenses, with the choice of tax-deferred accounts, taxed investments and savings, social security and other retirement benefits.   The old stand-by recommendation of 4% of the portfolio may or may not be suited to an individual retiree.  A financial advisor can also make educated recommendations on whether to convert an employer-sponsored retirement plan (401k, 403, 457 or TSP) into an IRA, or convert an IRA to a Roth IRA.  A financial professional can also help retirees make the transition from being lifetime savers to spending the money they worked so hard to accumulate!


Swicker Law PLLC