I continue to find the Wall Street Journal one of the best sources of financial advice for seniors. In the “Ask Encore” column on Monday, October 31, 1017, Glenn Ruffenach recommends that retirees retain a financial advisor, despite fees that can run to 1% of assets. While some retirees have the skills and time to manage their finances late in life, Mr. Ruffenach recommends an advisor to:
- Keep you from doing something stupid, like investing in a business opportunity offered by a relative or selling aggressively in a market pullback.
- Establish and maintain a good allocation among asset classes.
- Efficiently manage your tax liabilities including required distributions from retirement accounts.
- Assist the surviving spouse, who may be less familiar with financial matters, with the support needed to maintain the nest egg you have built together.
If fees are a sticking point for you, Mr. Ruffenach notes major funds families, such as Vanguard Group (and I would add T. Rowe Price and Fidelity) and some financial service companies like Charles Schwab, Betterment and Wealthfront are now competing to be your advisor with fees considerably lower than 1%. I still see an experienced financial advisor offering more personalized advice than that available from the less seasoned staffers or automated advisory services available at some of the firms noted above. But, the key advice for retirees is that there is value in having an outside advisor and you should shop for one that offers a combination of services and fees with which you are comfortable.