Benefits of Working with a Professional Financial Advisor

Studies show that investors who use a professional financial advisor achieve better results on average than investors who don't. A professional financial advisor offers you significant advantages, including:

• A well-structured portfolio. An advisor will begin by making an asset allocation recommendation based on your specific financial needs and personal situation. Then, he or she will help you decide which investments to include in your portfolio and in what combinations, based on the concept that for any given level of risk, there is an optimum combination of investments that will give you the highest rate of return.
• A disciplined process. Emotional investing can lead you to move money in and out of investments at inopportune times. And when you "time the market" this way, you may end up habitually buying high and selling low, which is the exact opposite of savvy investing. Over time, by letting your emotions guide your investment decisions, you can do serious harm to your portfolio and, more importantly, to your financial goals. The right advisor will keep a steady hand at the tiller of your portfolio, helping you make investment decisions based on rational and analytical thinking instead of emotion.
• Guidance on making difficult rebalancing decisions. As some assets appreciate and others lose value, your portfolio's asset allocation changes, which affects its risk and return properties. If you let the allocation drift far enough away from your original target, you end up with a different portfolio than what you set out to achieve. To maintain your targeted asset allocation, you may need to periodically rebalance by selling assets that have increased in value and purchasing others that have remained stable or decreased in value. An advisor can help you rebalance and stay on track in pursuit of your long-term goals.
• Planning for life events. Everyone has major life events to plan, save and invest for. Maybe you want to buy a new home, put your child through college, or retire in financial comfort, among other possible goals. How will you accumulate enough funds to cover the costs of life's biggest-ticket items? And how should you invest for multiple life events all at the same time? A professional financial advisor can shed light on all the competing milestones you're hoping to achieve.
• Assistance with tax-efficient investing. Taxes can take a significant bite out of your assets. A professional financial advisor can help you sort through which assets to hold in taxable versus tax-deferred accounts and keep you on top of the tax implications of different investment decisions.
• Regular reporting. A professional financial advisor will continually evaluate your portfolio's performance and benchmark it to an appropriate index, assessing the ongoing appropriateness of your investments The advisor will keep you up to date on how your portfolio is doing and regularly check with you about any changes in your financial circumstances or goals.

Choose an independent, fee-only financial advisorIf you decide to work with a professional financial advisor, be sure to pick one who is independent and works on a fee-only basis. Unlike a commission-based advisor, a fee-only advisor receives no commissions from companies offering mutual funds, insurance or other financial products. So a fee-only advisor can focus entirely on offering you objective and unbiased guidance based on your unique objectives and risk tolerance.A fee-only advisor will charge you either a periodic fee based on the invested amount he or she manages for you or an hourly rate. Using a fee-only advisor may ultimately be more affordable than you think. Because a fee-only advisor can often provide access to institutional mutual funds and other low-cost investment options that may not otherwise be available, working with such an advisor can be less costly than working with a commission-based advisor or going it alone.Think of it this way. If you were to do the legwork of investing on your own, would you have the discipline to stay with your plan for the long term, through the ups and downs of the market? In our experience, working with a professional, independent, fee-only financial advisor significantly increases the likelihood that you will achieve a better outcome.