Broker Check
Do I need a financial advisor in retirement?

Do I need a financial advisor in retirement?

March 22, 2019

Many people nearing retirement age wonder whether they would benefit from securing the services of a professional financial planner. The answer is, most likely, yes. A good planner, who is your advocate (a fiduciary advisor) in all things, can make a big difference. But the specific benefit for you will, of course, depend on the details of your situation.

As you look at the potential value of working with a financial planner,  you could see benefits in several different areas:

  • Advice about how to prioritize your financial goals can fundamentally affect your retirement. Some questions a financial advisor can help with include:
    • Can you afford to travel on a big vacation trip every year in retirement, or should it be every other year? The difference could be major.
    • Can you benefit from moving nearer to your grandchildren and moving to a low-tax state?
  • Advice about managing risk to your financial plan is another important area. When this is done well, it’s also difficult to measure because it’s about preventing a train wreck that would destroy your plan. If it works well, there is nothing to see. Financial advisors can help you determine:
    • Do you have enough life insurance to protect the family from both the risk of disrupted income and the expense of being a one-earner family?
    • Do you have health insurance and long-term care insurance to be sure that retirement does not get consumed by a negative health event for one partner?
  • Advice about what to do when investment markets are going rotten can be priceless. This includes:
    • Having the wisdom to understand when it may be valuable to adjust your lifestyle.
    • Knowing when to change investment strategy and when to “trust the process.”
    • Having an investment plan that is more resilient during challenging times, giving you more flexibility.
  • Advice on what investments to own can make a difference on your performance.
  • Advice on what investment accounts to use can make a big difference on the tax impact on your investments.
  • Advice about how much to withdraw from accounts and when to make those withdrawals can significantly affect financial performance.
  • Advice on how to react to unexpected financial news can be priceless. Having a trusted resource with whom you can discuss upsetting or confusing news can be a significant comfort.

Morningstar Inc., a global financial data firm, did a research study to measure the value of professional financial advice and the estimated and average benefit of about 2.45 percent per year.

Morningstar Advisor Gamma
Investor questionBenefit of financial advice (%)
1. Why invest at all?0.05%0.30%1.00%
2. Which type of account is best for my situation?0.10%0.25%0.50%
3. What is the appropriate risk level?0.10%0.40%1.00%
4. Which asset classes should be included?0.00%0.20%0.60%
5. How does the risk of the goal affect how I invest?0.05%0.20%0.50%
6. What investments are right to help me reach my goal?0.00%0.45%1.50%
7. Should my investments be revisited or rebalanced?0.10%0.65%1.60%
Total additional annual returns added by advisor∼0.40%∼2.45%∼6.70%

Source:“Alpha, Beta, and…More Gamma,”Morningstar

How do I find a financial advisor?

Part of building that plan and executing it successfully is choosing a great partner to help you.

If you think you might retire in the next 10 years, it’s a great time to visit with a CERTIFIED FINANCIAL PLANNER™ professional. Start your search here. The link will let you see CFP® professionals near you.

As you visit with financial planners, I suggest a couple things to check:

  • Is the advisor always the client’s advocate – a fiduciary advisor?
  • Is the advisor only paid by clients, not any financial product manufacturer or distribution network? That would be a fee-only advisor.

These two points help assure that you are working with a professional who is committed to your best interest at all times. It seems sort of obvious to me that a professional would work in this way, but it’s not automatic.

A fiduciary, fee-only, CFP® professional can help you create a financial plan that is driven by your goals and priorities and addresses all aspects of your financial life. With a big-picture approach, you will be better prepared to understand your options at every step along the way.

Yes, I am a CFP® professional. I’m always a fiduciary and I only work on a fee basis. And yes, I’m still taking on a few great families to be part of my financial planning practice.

If this article has you thinking about the value a planner could add to your retirement, contact my office at I am always happy to meet with people who are working on their retirement plans. Dunncreek Advisors does not provide legal or tax advice, nor is this article intended to do so.