By Cyril Tuohy
With all the criticism surrounding 401(k) plan retirement fees and regulators looking more closely at licensing requirements, it hasn’t been the easiest of years for financial advisors. So the time has come to show them a little love.
Confident self-directed investors and retirement planners may have no need for advisors, but for most workers busy showing up for day jobs and raising children, advisors play an important role in offering peace of mind.
Surveys consistently show that investors who use advisors feel more confident about their future, and as Americans become de facto managers of their own retirement, the role of an advisor is likely to grow.
Asked why investors should be thankful for their advisor, the National Association of Insurance and Financial Advisors (NAIFA) queried some of its members and had this response for InsuranceNewsNet:
- Financial advisors know how to help you prioritize the important elements of your life while guiding you on how to achieve financial independence and thrift.
- Advisors keep you calm. Financial advisors provide calmness and clarity during chaotic and unclear times.
- Advisors know what they’re doing. Financial advisors have the knowledge and expertise to help you choose the right protection products and strategies that will secure the financial futures of your family and your business.
- Advisors help you face the realities of life and death. Financial advisors are among the few professionals who recognize the need to be willing, able and committed to ask clients tough questions so they can learn about their clients’ financial plans, hopes, dreams and goals.
- Advisors have a large network. With good financial advisors, you benefit from their network of other professionals who can assist you in other areas of your life.
- Thanks to your financial advisor, you will have to retire only once.
In a brief interview with InsuranceNewsNet, Linda Leitz, chairwoman of the National Association of Personal Financial Advisors (NAPFA), also pointed to the importance of advisors’ holistic approach to organizing the lives of clients.
She noted the following:
- Clients of fee-only advisors know what they are paying, and they know that advisors have their best interests in mind.
- If a client or their significant other has a disagreement about money, advisors serve as an objective third-party to help with decisions.
- NAPFA advisors are not looking at only one financial area – taxes, investments, retirement – but at a client’s whole financial picture. Money is part of everyone’s life, not a stand-alone issue to be managed in a separate silo.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
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