Recently in a piece written for Morningstar.com, Christine Benz had this to say about “When It Pays to Hire A Financial Professional”:

Paying a financial planner an ongoing fee to handle every aspect of your financial plan can make sense if you’re extremely time-pressed or if your finances are particularly complicated. Ditto if you’re very rich. Paying for ongoing financial advice (and hand-holding) may also be worth it if you’ve had trouble sticking with your investment plan through the market’s ups and downs. The best advisors earn their keep many times over by saving investors from their own worst tendencies to buy high and sell low.

For most other investors, however, I’d argue that it’s not that difficult to create a sensible investment plan on your own…

Now how she can list those four conditions when it is appropriate to hire an advisor and then conclude that “most…investors” can do it “on [their] own” is just mind-boggling to me. So ask yourself:

1. Are you time-pressed?
2. Are your finances particularly complicated? (Before you answer, consider the state of the economy too.)
3. Are you very rich? (She seems to think that already having acquired lots of riches is a sign that you need an advisor. I would argue that one’s inability to continually increase their wealth would be an indicator that they need an advisor.)
4. Have you had trouble sticking with your investment plan?

Again, does anybody not fall into one of these four categories? And when you consider the loads of BAD information that parades around as sound investment advice, it’s a wonder that we haven’t all been reduced to abject poverty…but stay tuned for that!

So what is the answer? Should you hire an investment professional? And what should you expect to receive for the money you pay?

In an earlier post, I recounted for you some things to expect from your financial advisor. These are the “goods” that an advisor offers and it is derived primarily from education, experience, expertise and sound reasoning. Intangible? Yes. Valuable? Without a doubt.

But is there anything tangible, more akin to a product, that you get from working with an advisor. Well, I don’t know about every other advisor in the world, but here are some of the “products” that I provide to my clients:

• A proprietary system (called the Financial Report Card) that grades one’s financial health and monitors economic growth.
• Professional money management with monthly monitoring and quarterly evaluation and reporting.
• Monthly reviews of all funds that hold clients’ money and a determination whether or not those funds should be retained.
• Quarterly emailed report of your account holdings, asset allocation and fund changes.
• Partnership with a full-service custodial firm that provides my clients access to over 14,000 funds and alternative investments.
• True diversification through my proprietary “Personal Wealth Analysis”
• Help establishing the “The Best Investment In the World…”

But if we boil all of this down into what is most beneficial about having an advisor, I think it would be two things: First, the encouragement (if not outright demand) that you prudently save and second, the giving of objective advice about personal, and many times emotional, financial decisions.

In fact, I prefer when clients call me to discuss financial moves BEFORE they make them. As one of my colleagues says: It is much easier to create a plan than to clean up a mess. But in the final analysis, an advisor is only as good as the advice you TAKE. So if this post convinces you of the value of hiring an advisor, GREAT. But I will have done you a much greater service if this blog convinces you of the value of making a good plan and assiduously FOLLOWING it.

Good luck with yours!