This topic has come up in many a discussion with my friends. My wife and I currently don’t use a financial planner.
In regards to financial affairs of the house, I have done everything on my own using personal finance software and am very comfortable managing this aspect of our lives. As readers of this blog, you know that I meticulously track returns.
I have set up all the necessary accounts to provide for our family as well as our retirement. I am unsure of what a finance planner/advisor would provide me over and above what I find relatively easy to do myself? Am I missing something?
A friend of ours swears by his financial advisor, but when I began probing, it seemed that what he really liked about his planner was the customer service. The finance advisor would respond quickly to e-mails and texts. He would drive out and visit my friend personally to discuss the state of his financial affairs, but all of that doesn’t matter to me.
What matters to me is returns, and it doesn’t seem that his financial planner is offering up better returns when you take his fees into consideration.
What I’ve done so far is to use online tools to determine the best asset allocation based on our age, goals, and risk tolerance. I have then used that assessment to determine which funds to buy within our different accounts.
On my own, I have set up our 401ks, 529 college savings accounts, and investment accounts. I track returns to ensure we are consistently meeting or exceeding market returns. I have set up our disability insurance and life insurance.
What’s funny is how our friend told me that his financial advisor suggested that he purchase whole life, though I don’t see any advantages in whole life. I prefer the lower cost term life insurance while investing the difference in cost between whole and term.
Is there something I am missing? As you can tell from our asset base, we have a lot. Is it time for someone to take a look at our finances to determine if we are maximizing returns and mitigating risks? Let me know how you feel, I’m eager to hear what you have to say on this topic.