December 28, 2018 • Retirement 101 / Articles and Insights

Why Do You Need a Financial Professional?

Most of us like to do things for ourselves. There’s nothing like the satisfaction that comes from a job well-done, whether it’s a home repair, a craft project, or a lovingly restored vehicle. But even the most confident DIY-ers will tell you that there are times to call in a professional.

Planning for retirement is one of those times. A good financial professional can provide a valuable outside perspective informed by years of experience and can help you solve problems you may not have even realized were on the horizon. And, contrary to popular belief, financial professionals have something to offer everyone, regardless of where you are in your retirement journey or how much you have in the bank.

You May Need a Financial Professional Because…

1. They Have the Experience

Planning for retirement can feel intimidating—especially if you think you might be behind, have an especially complex financial situation, or are just starting to approach the process. That’s where a financial professional can help. Think of them like a coach—they know how the retirement preparation process should work, and they have the knowledge and experience to help guide you along the way. 

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Because financial professionals work with clients from all walks of life and with a wide array of financial considerations, they’ve seen a lot—which means they’re going to be better able to help you. That experience allows them to see potential roadblocks along the path to your retirement and help you solve them. They’ll also be able to provide you with an objective, outside perspective to help you find retirement solutions you may not have considered before—after all, they’ve probably seen financial situations like yours before, and know what’s worked for other clients. They’re trained to help you evaluate your needs, and can help create a retirement strategy based on your lifestyle and work situation and can help keep you on track towards the retirement you want.

A financial professional can help you determine how you should balance your strategy and help ensure that your strategy remains balanced throughout your retirement journey.

2. They Can Do What You Can’t

Beyond having the experience to help create a retirement strategy that works for you, financial professionals can do things to help you meet your retirement goals that you can’t do yourself. If you’re interested in a product like permanent life insurance or an annuity, you generally need to work with a licensed insurance and financial professional. There’s a good reason for this: the life insurance and annuity markets are vast, with products to fit many different financial situations and retirement goals. Without a financial professional, it can be hard to navigate that marketplace and find the products that are right for you.

An experienced financial professional who’s familiar with the types of products you’re interested in is vital to help build a strategy that meets your needs for income in retirement.    

Most retirement strategies try to balance growth with risk tolerance by dividing up your money among a variety of retirement products that offer different benefits. For example, products like annuities and life insurance can offer protection benefits and growth potential, while products like mutual funds can offer the potential of higher returns, along with the possibility of higher risk. A financial professional can help you determine how you should balance your strategy, find and purchase the products that are right for your goals, and help ensure that your strategy remains balanced throughout your retirement journey.

3. They Do More Than Just Preparing for Retirement

Financial professionals aren’t restricted to just preparing for retirement! Generally, if it involves money or savings, a financial professional can help. They’ll be there to present your options, help evaluate your priorities, and offer guidance concerning your financial decisions.

Depending on the licenses they hold, some additional services financial professionals can provide include:

  • Planning for college expenses
  • Estate planning strategies
  • Tax planning strategies
  • Retirement account rollovers
  • Advice when starting a new business or changing employment
  • Insurance protection
  • Cash flow planning
  • Saving for major expenses such as weddings, funerals, and elderly care

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Finding a Financial Professional

It’s important to find a financial professional who meets your needs and who you feel you can trust. Looking for a financial professional is a lot like looking for a doctor—you want to find someone whose skills meet your needs and your expectations, who listens to you, and who understands your unique situation.

When meeting with a financial professional, have an idea of what services you’re looking for, and ask them what they can deliver and if they have any limitations on what they can provide. It’s also important to understand payment: what services you're paying for, how much those services cost, and how they get paid.

How Do Financial Professionals Get Paid?

Financial professionals charge for their services in different ways. Some charge a fixed or hourly fee for the time it takes to develop a financial strategy, but don’t sell products that will help you fulfill that plan; some are paid by commissions on the products they sell; and others use a combination of fees and commissions.

The commission covers, in part, the financial professional’s cost of doing business and providing services to you. Commission structures vary depending on the type of financial products involved and the licenses and registrations they hold.  

With most annuities and life insurance products, the commissions paid to the financial professional will be paid by the insurance company—most annuities and life insurance products have these costs factored into the design of the product. This means that there are no deductions from your money to pay commissions to your financial professional. If you purchase a $100,000 annuity, the full $100,000 will be placed into your annuity right away.

Regardless of the financial professional’s commission and fee structure, they should be straightforward with you about that fee structure and how they get paid.

With other financial products, the financial professional will typically charge you a commission or fee that’s paid directly from your investment account—this tends to be either a percentage of the account value or a flat annual fee. 

Regardless of the financial professional’s commission and fee structure, they should be straightforward with you about that fee structure and how they get paid.

No matter your financial situation or your place in your retirement journey, a financial professional can be a valuable addition to your strategy. Even the best DIY project can benefit from a professional opinion. You deserve a retirement strategy you feel confident about, and guidance from a financial professional can help provide that.

Insurance and Annuity guarantees are backed by the financial strength and claims-paying ability of the issuing company.

Annuities are long term financial products designed for retirement income and may not be suitable for everyone. They involve fees, expenses and limitations, including surrender charges for early withdrawals. Some include optional riders and benefits that may come at additional cost. Annuity product and feature availability may vary by state.
The purchase of a life insurance policy is an important decision. Be sure to carefully evaluate the features and benefits, costs and limitations of any policy you are considering before making a purchasing decision.

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