Tag: financial planning

Online Financial Advisors – Is a Robo-Advisor or Human Advisor Right for You?

Posted on by Colette Nichol

Online Financial Advisors: Is a Robo Advisor or Human Advisor Right for You?

Should you be working with an online financial advisor aka. robo advisor? Or do you need the help of a qualified professional and fiduciary? Human vs. robot, let’s dig in.

By Michael Urch, CFP® of 360 Financial, Senior Wealth Manager

As a CERTIFIED FINANCIAL PLANNER,™ Michael advises his clients on insurance planning, investment planning, retirement income planning, tax planning, and estate planning. He prides himself on being a professional advisor who puts planning before products.

What Is a Digital Financial Advisor?

Before everyone started meeting in Zoom rooms, the term “online financial advisor” was coined to refer to an online platform that allows you to manage your investments. You’re not actually working with an advisor, you’re doing DIY investing through a platform that simplifies the process.

But is this the best choice?
And what are your other options?

In this article, we’ll go into the pros and cons of both traditional fiduciary financial advisors and online financial advisors.

a traditional financial advisor has a legal obligation to act in your best interest

The Benefit of Financial Advisors Who Work with You Online

Not all financial advisors have pivoted to keep up with the demands of 21st Century investors. But if you can find a financial advisory firm with fiduciary advisors who will work with you online, this may be the best option for you.

Why?

Because when you work with a fiduciary, they have a legal obligation to act in your best interest at all times. A fiduciary can’t sell you packaged investment products with excessive fees, so you can know that you have a customized portfolio for your risk tolerance and goals. 

While a robo-advisor (aka. algorithmic investment management) may provide some benefits and is certainly an improvement upon just keeping your money in your mattress, you won’t get help that’s specific to your needs and goals. You also won’t have anyone to talk you off the ledge when you go to sell all your investments when the market takes a turn for the worse.

For some people with nerves of steel who are in the very early years of investing a robo-advisor may be a good fit. But for anyone who wants guidance and is moving closer to their retirement date, working with an experienced professional who can meet online via Zoom is certainly preferable.

Should You Work with a Financial Advisor Online?

It used to be that you had to work with a financial advisor in your local area. But that’s no longer the case. At 360 Financial, we work with clients all across the US as well as within our home state of Minnesota. We’re able to give our clients full-service wealth management that rivals the big investment firms no matter where they live. If you’re an American who lives abroad for some of the year, this might be even more critical to you.

Digital nomads often earn well but don’t have their investments managed effectively.

Likewise, entrepreneurs and business owners often have all or most of their wealth tied up in their businesses. This can be risky. It’s important to have your assets diversified because then you don’t have to spend sleepless nights worrying about whether everything you’ve built might disappear with one bad move.

What Is a Robo-Advisor?

A Robo-Advisor relies on algorithms to help individuals manage their investments. The scope of advice provided is generally limited to investment advice. Many rely on their own proprietary tools to help customers rebalance their portfolios, tax loss harvest and automate other investing decisions.

What Is a Fiduciary Financial Planner?

A Fiduciary financial advisor is an advisor that has a legal obligation to make recommendations that are in the best interest of their clients. CERTIFIED FINANCIAL PLANNER™ professionals are held to this fiduciary standard in all of the recommendations that they make, not just in regard to investment decisions, but also in all other addressed during the financial planning process.

What Are the Best Digital Financial Advisors?

Betterment is one of the best known digital financial advisors. Bloom Retirement Alternative is another popular option, and Vanguard also has a robo advisor offering. All of these Robo Advisors help individuals to manage their investment portfolio.

a robo advisor relies on algorithms

5 Benefits of Working with a Financial Advisor Rather than a Robo-Advisor

1. Traditional Financial Advisors Help with Tax Planning and Estate Planning

Have a CFP® professional review your tax return for tax planning, assess whether your savings rate will help you accomplish your retirement goal, and help guide you through a conversation about your legacy planning. This is something your robo-advisor can’t do for you. And it’s just part of the reason why for anyone with substantial assets, a complex tax situation, or who plans on growing their wealth, a robo-advisor might not be the best fit.

2. Financial Advisors Prevent You from Making Massive Investment Errors

A financial advisor provides an extra barrier between you and your investment decisions. Rather than allowing our clients to quickly buy-and-sell their investments based on what they are thinking or feeling at any given moment, we provide due process. Each client gets an investment policy statement and our advisors meet as an investment committee every two weeks to review our portfolios. We do not make hasty decisions, and we stay committed to a disciplined process. This prevents clients from making catastrophic investment decisions that could affect their net worth for years to come.

3. Financial Advisors Know What Is Important to You

Everyone has their own priorities, preferences and goals in life. A good advisor is going to spend time understanding what is really important to you. Then they will create a plan that will make progress toward your goals. An algorithm can only go so far, and it does not deliver customized advice.

4. A Robo-Advisor Is No Match for a CERTIFIED FINANCIAL PLANNER™ Professional 

A certified financial planner helps in all of the realms of financial planning. Investments are only one element of a financial plan. Working with a CFP® professional will help you to view your entire financial picture and provide recommendations for far more than investments, which also often leads to a more successful investing experience.

5. The Cost of an Advisor Is Often Offset

A good financial advisor will provide their clients with multiples of their fee in value. In other words, the cost of working with a good financial advisor is worth it. But why? A financial advisor who is great at what they do will coach clients in wealth building strategies, show clients how well they are moving toward their goals, and stand between clients and bad investment decisions. They will be there for you at every important financial milestone ensuring that you make the best possible financial and wealth-building decisions.

advisor question and answer

Common Questions about Financial Advisors and Planners

Is it worth paying for a financial advisor?

Yes, especially if you do not have the time or temperament to successfully invest and create a financial plan on your own.

How much money do you need to talk to a financial advisor?

Generally, I recommend talking with a financial advisor after your net worth is more than $500,000.

Is it smart to invest with a financial advisor?

Yes, especially if you do not have the time or temperament to successfully invest on your own.

What is the difference between a financial advisor and a financial planner?

A financial planner is going to focus on all the areas of financial planning, where some financial advisors are focused on investment management. Titles are not standardized across the industry, so sometimes it can be difficult to tell whether someone is really able to offer financial planning. As a good rule of thumb, if you are working with a CFP® professional they are able to provide financial planning for you.

What is the difference between a financial advisor and an investment advisor?

An investment advisor or a registered investment advisor is not an individual. An RIA is an entity (or a company) that provides investment advice per the 1940 Investment Company Act. RIAs are held to a fiduciary standard. Many financial advisors are investment advisor representatives. 360 Financial is an RIA and I am a wealth manager, a CFP® professional and an investment advisor representative. I am held to a fiduciary standard both as an investment advisor representative and a CFP® professional.

How do I find a legitimate financial advisor?

I recommend working with a CFP® professional who works at an RIA. You can research at Adviser Info for information on financial advisors or registered investment advisors.

What is the average cost of a financial advisor?

Each advisor has their own fee structure. It is fairly common for advisors to charge a fee based on the investments that they are managing for you. The industry average tends to be between 1 and 1.5%. Some firms charge an additional fee for financial planning services, and some firms include financial planning in the single asset under management fee.

Are robo-advisors good for beginners?

If you are in the early years of wealth accumulation, a robo advisor can be a great place to gain some investment experience. Once you are above $500,000 in net worth, you likely would benefit more from a stronger offering.

How much is a personal financial planner fee?

Financial planners can charge hourly, on a project basis, a monthly retainer, or include planning as part of their asset under management fee. If you are paying for a stand-alone financial plan, it is not uncommon to see a charge of $3,000 – $10,000 (depending on the complexity of your situation).

Are financial planner fees worth it?

If you are in need of a financial planner, can you really afford not to work with one? In some cases, I have seen clients come out ahead financially after working with a financial planner, and I always see someone have increased confidence after having a professional create a financial plan for them.

Work with a Financial Advisor Online or In Person

If you need a wealth management team to help you achieve your big-picture goals, we recommend scheduling a call with a financial advisor at 360 Financial.

360 Financial is one of Minnesota’s best independent wealth management firms. We work with clients in Minnesota and across the US. If you’d like to work with a team that always puts your best interests first and is committed to helping you create a lasting legacy, please get in touch. 

Schedule a 15-minute Call

Read More:

How to Choose a Good Financial Advisor

About the Author: Michael Urch

Michael Urch Senior Wealth Manager and CFP

As a CERTIFIED FINANCIAL PLANNER,™ Michael advises his clients on insurance planning, investment planning, retirement income planning, tax planning, and estate planning. He prides himself on being a professional advisor who puts planning before products. This is one of the reasons he was attracted to 360 Financial’s client-focused culture. Michael likes to start with each client’s “why.” By understanding what’s truly important to them, the “what” of investment and planning strategies can be custom designed to support their long-term ambitions.

Prior to joining 360, he spent nine years honing his skills first at a Fortune 100 Financial Services Company and then at independent, planning-centric firms. He graduated magna cum laude from Bethel University with a BA in economics and finance, as well as a minor in mathematics.

Michael lives in Golden Valley, Minnesota with his wife, Bri and their three children. When he is not working, he enjoys exploring parks and reading books as a family, hiking, and playing guitar.

Schedule a 15-minute Call with Michael

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

401(k) Retirement Planning Essentials

Posted on by Colette Nichol

401(k) Retirement Planning Essentials

401(k) retirement planning is essential for most Americans who want to retire with a comfortable and sustainable lifestyle.

By Will Grant, CFP® CPWA® of 360 Financial

As a CERTIFIED FINANCIAL PLANNER™ and Certified Private Wealth Advisor®, Will helps clients create their ideal life through values-based financial planning. His process is designed to pursue each client’s objective, whether it’s preparing for retirement, ensuring smooth business succession, funding for education, implementing wealth transfer strategies, or navigating other impactful financial events.

Retirement Planning and Your 401(k) Plan

Retirement planning is an essential step to ensure financial security later in life. The 401(k) plan is one of the most popular tools used by Americans for retirement. 

By setting aside a portion of their income, employees can build a nest egg and start building wealth and preparing for retirement. Additionally, many employers offer matching contributions, further boosting the potential savings. Understanding the ins and outs of a 401(k) is vital for maximizing its benefits.

Let’s go over the benefits of using your 401(k) as part of your retirement plan. 

Table of Contents

  1. What is a 401(k) Plan?
  2. How does a 401(k) retirement plan work?
  3. Traditional 401(k)
  4. Roth 401(k)
  5. How to Contribute to Your 401(k) Plan for Retirement
  6. Pros of a 401(k) for Retirement Planning
  7. Cons of a 401(k) for Retirement Planning
  8. Contribution Limits of a 401(k) Plan
  9. 401(k) vs IRA for Retirement Planning 
  10. 401(k) Updates for 2023
  11. Required Minimum Distributions i.e. What You Have to Withdraw at Retirement
  12. What to Do with Your 401(k) When You Switch Employers
  13. Common Questions about Retirement Planning and 401(k) Plans
  14. Work with a Financial Advisor Online or In Person

What is a 401(k) Plan?

A 401(k) is a retirement savings plan sponsored by employers for their employees. It allows you to save a portion of your paycheck before taxes are taken out. These funds are then invested in a variety of options, including stocks, bonds, and mutual funds. 

Over time, these investments can grow tax-deferred until withdrawals are made in retirement. The name “401(k)” comes from the section of the U.S. tax code that outlines its provisions.

How does a 401(k) retirement plan work?

As an employee, you decide how much of your paycheck you want to contribute to your 401(k) plan. This money is then deducted from your wages or salary before taxes, reducing your taxable income. 

Employers can also contribute to the plan, often through matching your contributions up to a certain percentage. Investments in the 401(k) grow tax-free until they are withdrawn. Once you reaches retirement age, you can start withdrawing from your 401(k), at which point the distributions (i.e. withdrawals) are typically taxed.

How does a 401(k) retirement plan work?

Traditional 401(k)

In a traditional 401(k), contributions are made pre-tax, which means taxes are deferred until funds are withdrawn. This allows employees to reduce their current taxable income, potentially placing them in a lower tax bracket. 

The investments grow tax-deferred, compounding over time. Withdrawals made in retirement are taxed as ordinary income.* 

Penalties usually apply if funds are withdrawn before age 59½, with certain exceptions.

*Ordinary income refers to the regular income an individual receives that is subject to standard tax rates, as opposed to preferential tax rates. It encompasses income generated from typical sources like wages, salaries, commissions, and rental income, among others. 

Roth 401(k)

The Roth 401(k) option allows participants to contribute post-tax dollars. Unlike the traditional 401(k), withdrawals in retirement are generally tax-free, assuming certain conditions are met. This can be a beneficial choice for those who anticipate being in a higher tax bracket during retirement. 

Contributions to a Roth 401(k) don’t reduce your taxable income for the year. However, the trade-off is the potential for tax-free withdrawals later on.

Determining which 401(k) plan makes sense is an important decision that will depend on your specific situation. Click here to schedule a time consult with one of our 360 Financial Wealth Managers. 

Schedule a 15-minute Call

Roth 401(k)

How to Contribute to Your 401(k) Plan for Retirement

To start contributing, employees typically select a percentage or fixed amount of their paycheck to allocate towards their 401(k). It’s crucial to review and potentially increase contributions annually to account for salary increases or changing retirement goals. 

Taking advantage of employer match programs is essential, as it’s basically “free money” for retirement. Regularly reviewing the investment options within the plan can help ensure alignment with your financial goals.

EXAMPLE:

It’s important to continuously review your 401(k) contributions and increase when appropriate. The difference can be significant. For instance, if a 25-year-old with a $100,000 income contributes 3% of their salary to their 401(k) annually and receives a 3% employer match, they would be saving $6,000 per year.

Assuming an average annual return of 7% on their investments, by the time they reach 65, their 401(k) balance would be approximately $1.2 million.

However, if they were to increase their contribution rate to 10%, the annual savings would amount to $13,000 including the 3% employer match, resulting in a substantially larger retirement fund. With the higher contribution rate of 10%, the 25-year-old would have amassed a retirement fund of around $2.6 million by age 65, assuming the same 7% average annual return.

This substantial difference showcases the power of higher contributions, allowing the individual to retire with financial security and the ability to enjoy a comfortable lifestyle.

How to Contribute to Your 401(k) Plan for Retirement

Pros of a 401(k) for Retirement Planning

401(k) plans come with the significant benefit of tax-deferred growth.

Tax-deferred growth refers to the increase in value of an investment in which the taxes on the investment’s earnings are not paid until a later date, typically upon withdrawal. In other words, while the investment grows and earns interest, dividends, or capital gains, no taxes are due on those earnings until they are withdrawn or distributed. 

The primary advantage of tax-deferred growth is the compounding effect. Because taxes aren’t taken out annually, the entire amount of earnings is reinvested and can earn even more. Over time, this can lead to significantly more growth compared to an account that’s taxed annually.

Many employers provide matching contributions, amplifying the amount saved. The array of investment options within a 401(k) can cater to different risk tolerances and financial objectives. Employees have the option to borrow against their 401(k), though it’s generally not recommended. High contribution limits make 401(k)s ideal for those looking to save sizable amounts.

Pros of a 401(k) for Retirement Planning

Cons of a 401(k) for Retirement Planning

There are some cons to 401(k)s, so it’s important to review some of the downsides. Early withdrawals from a 401(k) can incur hefty penalties and taxes. Investment options can be limited compared to other retirement accounts, potentially hindering diversification. Some plans come with high fees that can eat into overall returns. 

Unlike Roth IRAs, traditional 401(k) distributions are taxable upon withdrawal. It might be complex for individuals to understand all plan details, potentially leading to sub-optimal choices. In fact, if you want to feel more confident in your future retirement, I recommend that you seek the advice of an experienced fiduciary Wealth Manager. 

Contribution Limits of a 401(k) Plan

Each year, the IRS sets limits on how much individuals can contribute to their 401(k) plans. For 2023, the contribution limit might be adjusted based on inflation and other economic factors. 

Catch-up contributions are allowed for those aged 50 and above, letting them save more as they near retirement. These limits do not include employer matches, which can further boost retirement savings. It’s essential to be aware of these limits to maximize contributions without incurring penalties.

The 401(k) contribution limit for 2023 is $22,500 for employee contributions. If you’re age 50 or older, you’re eligible for an additional $7,500 in catch-up contributions, raising your employee contribution limit to $30,000.

401(k) vs IRA for Retirement Planning 

Both 401(k)s and IRAs are powerful tools for retirement savings. While 401(k)s are employer-sponsored, IRAs are individual retirement accounts anyone can open. IRAs often offer a broader range of investment choices compared to 401(k)s. 

However, 401(k)s typically have higher contribution limits, especially when including employer matches. The choice between the two often depends on individual circumstances, financial goals, and the availability of employer-sponsored plans.

401(k) Updates for 2023

As financial landscapes evolve, so do regulations and provisions for retirement accounts. In 2023, there may be updates regarding contribution limits, withdrawal rules, or other plan features. 

It’s vital to stay informed about these changes to optimize retirement planning strategies. New legislation or economic shifts can impact how 401(k) plans operate. Regularly consulting with your Wealth Manager or HR departments can ensure individuals remain up-to-date.

Required Minimum Distributions i.e. What You Have to Withdraw at Retirement

Required Minimum Distributions (RMDs) are amounts that retirees must withdraw from their 401(k) plans starting at a certain age, currently 72. The amount is calculated based on life expectancy and the account balance. 

Failing to take RMDs can result in significant tax penalties. While RMDs apply to traditional 401(k)s, Roth 401(k)s also have RMD rules unless rolled into a Roth IRA. Planning withdrawals strategically can help manage tax implications during retirement.

What to Do with Your 401(k) When You Switch Employers

When changing jobs, individuals have several options for their 401(k) funds. They can leave the money in the old employer’s plan, though they may no longer be able to contribute. Another option is to roll the funds into a new employer’s 401(k) or into an IRA. Cashing out is another choice but comes with potential penalties and tax implications. It’s crucial to weigh the pros and cons of each option and possibly consult with a Wealth Manager.

Common Questions about Retirement Planning and 401(k) Plans:

Common Questions about Retirement Planning and 401(k) Plans:

What is a good 401(k) amount to retire?

A good 401(k) amount to retire largely depends on individual lifestyle and expenses, but many financial experts suggest having 8-10 times your final salary saved by retirement age. The goal is to have sufficient funds to cover 70-85% of your pre-retirement income annually during your retirement years.

A 401(k) represents just one avenue among various account types available for pursuing your financial objectives, including taxable accounts and Roth accounts. Seeking guidance from a Wealth Manager to comprehensively assess and monitor the diverse assets you’re accumulating by type can be a prudent approach, ensuring you stay on track towards your retirement goals.

How much should I have in my 401(k) if I want to retire at 55?

If you aim to retire at 55, you should consider having saved at least 10-12 times your annual salary in your 401(k) by that age, given the earlier retirement age and potential for a longer retirement period. Early withdrawals before age 59½ may also incur penalties unless specific criteria are met.

How much will a 401(k) grow in 20 years?

The growth of a 401(k) over 20 years depends on the contribution amount, employer match, investment choices, and annual returns. Assuming an average annual return of 6-8%, your 401(k) can potentially double roughly every 9-12 years, depending on compounding frequency and market performance.

Is a 401(k) better than an IRA?

Both 401(k)s and IRAs offer unique advantages. A 401(k) often includes employer matches, allowing for higher total contributions, while an IRA may provide more investment options and flexibility. The best choice depends on individual needs, access to employer-sponsored plans, and financial goals.

Does a 401(k) gain interest?

A 401(k) doesn’t typically earn “interest” in the traditional sense. Instead, it earns returns based on the investments selected, such as stocks, bonds, or mutual funds. The returns can be in the form of dividends, capital gains, or interest from fixed-income investments.

Can I pull money out of my 401(k)?

Yes, you can withdraw money from your 401(k), but doing so before age 59½ often incurs a 10% early withdrawal penalty and the amount is subject to taxes. There are exceptions for specific situations like financial hardships, buying a home, or medical emergencies, but it’s essential to understand the rules and potential implications.

How 360 Financial Can Help You Plan for Retirement 

Unlock the future you envision with 360 Financial. With expert insights, financial planning tailored to your needs and goals, and a big-picture approach, we turn your work-optional dreams into actionable plans. Begin your journey to a secured, fulfilling retirement with the guidance of 360 Financial.

Work with a Financial Advisor Online or In Person

If you need a wealth management team to help you achieve your big-picture goals, we recommend scheduling a call with a financial advisor at 360 Financial.

360 Financial is one of Minnesota’s best independent wealth management firms. We work with clients in Minnesota and across the US. If you’d like to work with a team that always puts your best interests first and is committed to helping you create a lasting legacy, please get in touch. 

Schedule a 15-minute Call

About the Author

William Grant

Will Grant, CFP

Will Grant enjoys empowering people to make informed decisions and seeing the positive impact his guidance can have on their lives.

Prior to joining 360, he spent seven years serving hundreds of clients at a boutique RIA focused on healthcare executives with equity compensation and then at a large, independent RIA. He earned a Bachelor of Science degree in Finance from Miami University and holds his Series 7 and 63 licenses through LPL Financial and his 65 license through 360 Financial.

Will lives in Minneapolis with his fiancée, Melissa. In his free time, he enjoys competing in triathlons, golfing and is an active member of the Minnesota Leadership Council for the Chick Evans Scholarship Foundation, which he was a recipient of.

Schedule a 15-minute Call with Will

Other Articles and Guides 

Minnesota Financial Planners

Financial Planning vs. Financial Advisor – What’s the Difference?

Schedule a Call

At 360 Financial, our clients come first. You deserve personalized attention. You’ll be happier and more confident in your financial future when you have an advisor who always puts your needs and best interest first. Schedule a 15-minute introductory call with a 360 financial advisor to see how we can help with your retirement, succession, tax, and estate planning.

Schedule a 15-minute Call

Financial Planning and Estate Planning in Minnesota

If you need financial planning assistance and a wealth management team to help you achieve your big-picture goals, we recommend scheduling a call with a financial advisor at 360 Financial.

360 Financial is one of Minnesota’s best independent wealth management firms. We work with clients in Minnesota and across the US. If you’d like to work with a team that always puts your best interests first and is committed to helping you create a lasting legacy, please get in touch.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Financial Planning for Retirement: Steps, Plans, and Rules

Posted on by Colette Nichol

Financial Planning for Retirement: Steps, Plans, and Rules

By Michael Urch, CFP, Senior Wealth Manager of 360 Financial

As a CERTIFIED FINANCIAL PLANNER,™ Michael advises his clients on insurance planning, investment planning, retirement income planning, tax planning, and estate planning. He prides himself on being a professional advisor who puts planning before products.

 

Tips on Essential Financial Planning for Retirement

Financial planning for retirement is crucial for anyone who wants a successful retirement.

Surprisingly, some people spend more time planning their annual vacation than they spend planning their retirement. We want to make sure that our clients have a plan in place and that they are confident that they will be able to retire knowing they will not run out of money.

Financial Planning Topics Covered:

  1. How to Plan for Retirement
  2. How to Save for Retirement
  3. Top 5 Retirement Planning Tips to Maximize Your Employment Benefits
  4. How to Invest for Retirement
  5. Why Diversification Is Important
  6. Why You Need to Know Your Risk Profile
  7. Working with a Fiduciary Financial Advisor
  8. Tax Planning and Retirement
  9. Estate Planning and Retirement
  10. Common Questions about Financial Planning for Retirement:
  11. Work with a Financial Advisor Online or In Person

How to Plan for Retirement 

There are two essential financial summaries to put together at the beginning of retirement planning. 

1) A net worth statement. This is a summary of all of the things you own (assets) and all of the money you owe (liabilities). It is a snapshot of your financial resources available for retirement.

2) A cash flow statement or budget. This is a summary of the annual income you expect to receive in retirement from social security and other sources, as well as your annual retirement expenses. (+)

Generally, you will have more expenses than income in retirement. You will then want to work with an advisor to create a plan to replace the rest of your income stream using the assets from your balance sheet.

How to Save for Retirement

It is important to regularly set-aside money for retirement.

The most common way to do this is by contributing to a 401(k) plan or 403(b) plan. IRAs and Roth IRAs can also be used as well as contributing to brokerage accounts. HSA’s are becoming a more common form of retirement savings as well. A general rule of thumb is to contribute 10% of your personal income to retirement, but we like to customize savings plans for our clients based on their specific situation. Schedule a 15-minute call if you want to talk to an advisor about personalized retirement savings strategies. (+)

Top 5 Retirement Planning Tips to Maximize Your Employment Benefits

  1. Contribute enough to get the employer match on your retirement accounts.
  1. Consider contributing to a Roth 401(k)/403(b) if you expect to have your income increase in the future.
  1. Evaluate whether you should choose a health insurance plan that allows you to contribute to an HSA. If yes, maximize your HSA for retirement
  1. Review your benefits packet for any deferred compensation benefits and make sure you are utilizing them.
  1. Make sure that you are utilizing all tax benefits (health insurance is pre-tax, FSA and dependent FSA accounts, etc.)
retirement planning

How to Invest for Retirement

Equities (stocks) are an asset class that has historically beaten inflation for the long-term.

The longer someone’s time-frame for investing and the further that they are from retirement, the more they should allocate to stocks. As retirement approaches, it may make sense to add more bonds to your overall allocation. These are the general rules of thumb, but it would be best to discuss your specifics with an advisor. (+)

Why Diversification Is Important

Risk cannot be eliminated when investing.

However, investment risks can be reduced through diversification. By having exposure to multiple companies and asset classes, our clients are able to have more confidence that if any one company or sector of the economy performs poorly, other investments in the portfolio can help sustain the investments.

Why You Need to Know Your Risk Profile

Knowing your risk profile is critical.

One of the most disastrous scenarios possible would be for someone to make a poor investment choice and sell out of their investments during the first market downturn in retirement.

It is extremely important to understand the level of risk that you are comfortable with and then to create an investment policy statement that guides portfolio decisions.

Working with a Fiduciary Financial Advisor

Is your financial advisor held to a legal standard of acting in your best interest in managing your investments and providing financial planning advice?

A registered investment advisor must manage investments as a fiduciary, and a CERTIFIED FINANCIAL PLANNER™ professional must give advice while acting as a fiduciary. We recommend working with a fiduciary whenever possible.

Your retirement plan should reflect your goals and vision for your life.

Tax Planning and Retirement

One of the largest expenses in retirement is taxes.

Why not work with an advisor that can help you avoid tipping the IRS? Roth conversion strategies, RMD strategies, charitable giving strategies, gain/loss realization strategies – all these and more should be on the table for discussion every year in retirement.

Estate Planning and Retirement

Are you planning to leave an inheritance?

Or do you want to plan on spending as much as possible while you are living? Should you have trusts in place to help manage your assets in the event that you are incapacitated? As with all financial planning topics, everything is related and it is important to think about your estate plan while putting your retirement plan together.

estate planning

Common Questions about Financial Planning for Retirement:

How do I prepare my finances before retiring?

Create a budget based on your spending today.

Then imagine yourself as being retired. Based on what you are spending right now, how much do you want to be spending in retirement? Finding out the right number here is important. With it in mind, you can work with an advisor to see whether it is achievable.

 

What is the safest place to put my retirement money?

Asset allocation in retirement is extremely important.

You have to balance different risks. One of the risks is market risk. This is the risk of stocks decreasing in value due to market volatility. Inflation is another significant risk. If you are only considering market risk, it may seem “safer” to have all of your money in treasury bonds, but it is important to not forget the long-term risk of inflation, which stocks are well suited to overcome.

What are most retirement plans missing?

The one thing that I see as most impactful in a retirement plan is a sense of purpose.

It is important to go beyond the numbers and the money that makes retirement possible and ask: what is this money for? Retirement can be more than simply “not working.” I recommend sitting down with a blank page of paper and asking: “what is going to give me a sense of purpose in retirement.”

Work with a Financial Advisor Online or In Person

If you need a wealth management team to help you achieve your big-picture goals, we recommend scheduling a call with a financial advisor at 360 Financial.

360 Financial is one of Minnesota’s best independent wealth management firms. We work with clients in Minnesota and across the US. If you’d like to work with a team that always puts your best interests first and is committed to helping you create a lasting legacy, please get in touch. 

Schedule a 15-minute Call

 

About the Author

Michael Urch

Michael Urch Senior Wealth Manager and CFP

Michael Urch is a Senior Wealth Manager at 360 Financial. Michael advises his clients on insurance planning, investment planning, retirement income planning, tax planning, and estate planning.

Prior to joining 360, he spent nine years honing his skills first at a Fortune 100 Financial Services Company and then at independent, planning-centric firms. He graduated magna cum laude from Bethel University with a BA in economics and finance, as well as a minor in mathematics.

Michael lives in Golden Valley, Minnesota with his wife, Bri and their three children. When he is not working, he enjoys exploring parks and reading books as a family, hiking, and playing guitar.

Schedule a Call with Michael Urch, Senior Wealth Manager

Other Articles and Guides 

Financial Planning vs. Financial Advisor – What’s the Difference?

Financial Planning in Minnesota

401k Retirement Planning Essentials

Schedule a Call

At 360 Financial, our clients come first. You deserve personalized attention. You’ll be happier and more confident in your financial future when you have an advisor who always puts your needs and best interest first. Schedule a 15-minute introductory call with a 360 financial advisor to see how we can help with your retirement, succession, tax, and estate planning.

Schedule a 15-minute Call

 

Financial Planning in Minnesota

If you need financial planning assistance and a wealth management team to help you achieve your big-picture goals, we recommend scheduling a call with a financial advisor at 360 Financial.

360 Financial is one of Minnesota’s best independent wealth management firms. We work with clients in Minnesota and across the US. If you’d like to work with a team that always puts your best interests first and is committed to helping you create a lasting legacy, please get in touch.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

How a Fiduciary Financial Advisor in Minnesota Can Help

Posted on by Colette Nichol

How a Fiduciary Financial Advisor in Minnesota Can Help

By Mike Rogers, AIF®, Founder and President of 360 Financial

Mike Rogers is a fiduciary financial advisor with over 30 years of experience in the financial services industry as an investment advisor and financial planner. He founded 360 Financial in 1995 and holds series 7 and 63 security registrations with LPL Financial.

 

Topics covered in this article

  1. What is a Fiduciary?
  2. What is a Fiduciary Financial Advisor?
  3. How to Find a Fiduciary Financial Advisory in Minnesota
  4. Is it Better to Have a Fiduciary Financial Advisor?
  5. Understanding the Fiduciary Standard in Financial Advising
  6. Ethical Responsibilities of a Fiduciary Financial Advisor
  7. Impact of Fiduciary Duties on Investment Strategies
  8. Regulatory Compliance for Financial Advisors
  9. Conflict of Interest Management for Financial Advisors with Fiduciary Duty
  10. Fiduciary Responsibility in Retirement Planning
  11. The Consequences of Breaching Fiduciary Duties
  12. Fiduciary Duties in Estate Planning and Wealth Transfer
  13. Evaluating the Performance of a Financial Advisor
  14. Work with a Fiduciary Financial Advisor in Minnesota

 

What is a Fiduciary?

A fiduciary is an individual or organization legally required to act in the best interest of another party. Fiduciaries must prioritize the interests of their clients above their own, which eliminates potential conflicts of interest and ensures you receive the highest standard of service and care.

 

What is a Fiduciary Financial Advisor?

A fiduciary financial advisor is a finance professional who is obligated to act in their client’s best interest. They provide financial advice and recommendations based on the client’s specific needs, goals, and circumstances rather than focusing on products or strategies that might benefit the advisor more than the client. 

For example, a fiduciary financial advisor can’t recommend a mutual fund that gives them a nice commission unless this mutual fund is the absolute best product for their client. When you work with a fiduciary, you don’t have to worry about being “sold” products you don’t need. Your advisor is legally required to act in your best interest at all times. 

 

How to Find a Fiduciary Financial Advisory in Minnesota

To find a fiduciary financial advisor in Minnesota, search for advisors with certified designations such as Certified Financial Planner (CFP) or Chartered Financial Consultant (ChFC). You can use online resources like the National Association of Personal Financial Advisors (NAPFA) or the Financial Planning Association’s (FPA) database. 

Always verify the fiduciary status by asking directly or checking the advisor’s Form ADV.

At 360 Financial, we are financial advisors, financial planners, wealth managers, and fiduciaries. 

 

Is it Better to Have a Fiduciary Financial Advisor?

Opting for a fiduciary financial advisor can be beneficial as they are required by law to act in your best interest. This obligation reduces the risk of conflicts of interest and ensures that your advisor’s recommendations align with your financial goals. However, it’s also important to consider an advisor’s qualifications, experience, and fees to ensure they are a good fit for your financial situation.

 

Understanding the Fiduciary Standard in Financial Advising

The fiduciary standard in financial advising refers to a strict code of conduct that advisors must adhere to. This standard requires advisors to act in a client’s best interest, avoid conflicts of interest, and disclose any potential conflicts. It’s a higher standard of care compared to the suitability standard, which only requires advisors to recommend suitable products.

 

Ethical Responsibilities of a Fiduciary Financial Advisor

Fiduciary financial advisors are bound by ethical responsibilities, including good faith and trustworthiness. They must provide accurate and complete information and diligently monitor and manage a client’s assets. They are also responsible for maintaining confidentiality and avoiding conflicts of interest.

 

Impact of Fiduciary Duties on Investment Strategies

Fiduciary duties significantly influence investment strategies. Advisors must consider the client’s financial goals, risk tolerance, and time horizon when making investment recommendations. They cannot recommend any investments that are not the absolute best fit for a client. This typically results in strategies tailored to each client’s unique situation rather than a one-size-fits-all approach. 

 

Regulatory Compliance for Financial Advisors

Like other U.S. states, financial advisors in Minnesota are subject to regulatory compliance. They must adhere to the rules set forth by the Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA). Compliance includes accurate record-keeping, transparent fee structures, and regular audits.

 

Conflict of Interest Management for Financial Advisors with Fiduciary Duty

Fiduciary financial advisors are required to manage conflicts of interest effectively. They must disclose any potential conflicts to their clients and take necessary steps to mitigate them. This ensures transparency and maintains the trust between the client and the advisor.

 

Fiduciary Responsibility in Retirement Planning

In retirement planning, a fiduciary’s responsibility is to provide advice that best suits the client’s retirement goals. This may involve suggesting suitable investment options, ensuring the client is maximizing their retirement benefits, and planning for a sustainable income during retirement.

 

Related Article: Is a Robo Advisor or Human Advisor Right for You?

 

The Consequences of Breaching Fiduciary Duties

Breaching fiduciary duties can have severe consequences. If a financial advisor does not act in the best interest of their client, they could face legal repercussions, potentially involving financial restitution and damage to their professional reputation. 

In some cases, advisors may lose their licenses or be banned from practicing. Clients who believe their advisor has violated their fiduciary duties can report their concerns to regulatory bodies such as the SEC or FINRA.

 

Fiduciary Duties in Estate Planning and Wealth Transfer

A fiduciary financial advisor’s role extends to estate planning and wealth transfer. They are expected to guide clients through the complex process of planning for the distribution of their assets upon their death. This includes understanding the client’s wishes, recommending appropriate estate planning tools (like wills or trusts), and potentially coordinating with attorneys or tax professionals. Moreover, they have to ensure a smooth, efficient transfer of wealth with minimal tax implications, always acting in the client’s best interest.

 

Evaluating the Performance of a Financial Advisor

Evaluating the performance of a financial advisor is not just about assessing the financial returns. It also includes reviewing how effectively they communicate, their responsiveness to your needs, and their ability to proactively address changes in your financial situation or the market. Advisors should provide clear, regular updates on your investments and be willing to discuss their decisions. Additionally, an advisor’s performance should align with your financial goals, risk tolerance, and investment timeline.

Remember, a fiduciary financial advisor’s primary obligation is to put your interests first.

 

Work with a Fiduciary Financial Advisor in Minnesota

If you need a wealth management team to help you achieve your big-picture goals, we recommend scheduling a call with a financial advisor at 360 Financial. 

Founder and CEO of 360 Financial, Mike Rogers, has been a financial advisor for over 30 years. As a fiduciary, he always puts his clients’ best interests first and is dedicated to helping them achieve their big-picture financial and life goals. With his growing team, Mike is committed to providing outstanding financial services to successful professionals and business owners so they can live their lives on their own terms and leave a positive legacy. 

360 Financial is one of Minnesota’s best independent wealth management firms. 360 works with clients in Minnesota and across the US. If you’d like to work with a team that always puts you first and is committed to helping you create a lasting legacy, please get in touch. 

Schedule a 15-minute Call

 

 

Read More: 

Online Financial Advisors – Is a Robo-Advisor or Human Advisor Right for You?

 

 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Financial Planning Young Adults: Saving, Investing, and Managing Money

Posted on by August Ash

Top 5 Financial Planning Tips for Young Adults

Saving, Investing, and Managing Money as a Young Adult

Written by Mike Rogers, Founder and President at 360 Financial

While there’s no magic formula to making money and growing your wealth, there are certain things you can do to stack the odds in your favor.

Starting at a young age is key because you’re more likely to develop good habits – which can make all the difference in achieving future financial success. For people in their late teens and twenties, this is the time to learn about finance and start saving for your financial future. The younger you are, the more time your savings and investments have to grow.

This article will give you tips on how to start saving, investing, and managing your money.

 

TABLE OF CONTENTS

  1. Why is Financial Planning Important at a Young Age?
  2. Top 5 Financial Planning Tips for Young Adults
  3. Earning more at a younger age
  4. Budgeting and managing your money
  5. Investing as a young adult
  6. Saving for a financially-free lifestyle
  7. Building your wealth and protecting it
  8. How do you Financial Plan in your 20s?
  9. Managing an Inheritance
  10. Financial Advisor for Young Adults

 

Why is Financial Planning Important at a Young Age?

The most valuable thing in life is time, and when you’re young, you have it.

The younger you are, the more time you have to make money. You also have more time to let your money grow through either investments or savings. Also, you have more time to take risks—which increases your rewards—and more time to make financial mistakes and learn from them.

Another reason it’s important to plan financially at a young age: Now is the time that you are building your habits. If you build habits that allow you to succeed financially now, you will carry those with you throughout the rest of your life.

 

financial planning young adults

 

Top 5 Financial Planning Tips for Young Adults

Here are our tips to help you plan financially:

1. Earning more at a younger age

Earning more money is the first step to financial freedom. You can’t save, manage, or invest money if you don’t have it. That’s why it’s so important to start earning more right away. While your mind might jump to side hustles, we urge you to try to work smarter, not harder. After all, no one wants to be constantly overworking themselves.

While side hustles can be great, first, it’s important to find a full-time income that adequately pays you for your skills. It’s important to know your worth by performing market research, so you can ask for enough and not under-sell yourself. Even after you get a job, it may pay off to keep yourself on the market. Wage growth for job switchers is 47% higher than for those who stay in their current job. This is because you have negotiating power when you’re switching jobs.

If you’re struggling to find a full-time job that pays enough, consider becoming self-employed. While it’s not the right path for everyone, it can potentially help you earn more.

 

2. Budgeting and managing your money

Once you start earning money, you need to budget and manage it — otherwise, you’ll spend it all too fast. You’ve probably heard the saying, “You can’t manage what you don’t measure.” When it comes to your money, that’s especially true.

When you know where all your money is going, it becomes easier to make decisions about how you want to spend and save. The first step is to simply record and analyze how you’re currently spending money, and where you can make changes.

After you analyze where your money is going, now it’s time to create a budget. A budget is a detailed plan for how much money will be coming in and going out over a given period of time.

Remember: A budget is a plan, and it won’t always be executed perfectly. Give yourself grace when you make mistakes, but continue to track your spending so you can avoid those mistakes next month.

 

3. Investing as a young adult

When you start budgeting and managing your money, you will begin allotting some towards savings. But letting ALL of your savings sit in a bank account isn’t the best way to grow your money. While savings are undoubtedly essential, we also recommend investing a certain percentage of your income monthly.

Investing is more of a risk, but it has a much higher reward than saving. And because you’re young, those risks are easier to take because you usually won’t be needing your money for decades—giving it time to grow again, even if you lose some along the way. You’ll keep your money in your investment account for the long-term and ride out any short-term downdrafts.

Investing your money will likely yield high returns, and it’s best to get started as a young adult.

 

4. Saving for a financially-free lifestyle

As we mentioned previously, saving is extremely important. Your main goal should be cutting your spending in unnecessary areas and allotting a certain amount of money each month into your savings.

Now is the time to save for financial freedom. This means you’ll have the money you need to live the life you want to live. Ideally, this means you create enough income, so you don’t have to work after you retire.

When you’re old, you won’t want to be spending your days working. You want to work and save now so that you can enjoy your older years in peace. But the best thing about savings, unlike investments, is that if you have an emergency, you can use these funds to help you.

We recommend starting an emergency fund first, which is a savings account that is meant to be used during a crisis. After that, start building a savings fund that you ideally won’t touch until retirement.

 

5. Building your wealth and protecting it

Building your wealth is a process that involves making, managing, investing, and saving money. You also have to protect your wealth as you grow up from avoidable losses and risks. Protecting your wealth means getting great insurance and working with a financial advisor.

A financial advisor does the following:

  1. Creates your financial plan
  2. Manages your investments
  3. Acts as your stock broker
  4. Advises and arranges insurance coverage
  5. Strategizes estate planning
  6. Makes financial decisions
  7. Executes your financial plan

All of which can take stress and tasks off your shoulders. Plus, a financial advisor is an expert who can get you better results than if you manage your money on your own.

 

How To Do a Financial Plan in Your 20s

When you create a financial plan, whether with a financial advisor or on your own, there is a process to follow. Here are the steps:

  1. Set your financial goals
  2. Understand what your current financial situation is
  3. Analyze your current course of action
  4. Research financial strategies to help you reach your goals
  5. Build financial strategies, including alternatives, so you have options
  6. Choose your financial plan
  7. Implement your financial plan
  8. Monitor progress
  9. Do research to update your current plan to meet your goals

However, when you work with a financial advisor, they will take on the majority of the grunt work, help you make decisions, and monitor your progress.

 

Managing an Inheritance

With more money comes more responsibility. While you have a great opportunity to build upon your wealth by managing your inheritance properly, there’s also a great risk of overspending and causing your inheritance to vanish quickly.

If you have received an inheritance, we highly recommend working with a financial advisor. They can help you properly invest your money so that it grows.

 

Financial Advisor for Young Adults

The prospect of working with a financial advisor may seem intimidating, but it really isn’t. The important thing to remember is that a good financial advisor wants to help YOU succeed and meet your financial goals. Many advisors work with young adults, and most have pricing that scales with you.

Overall, when you’re looking for a financial advisor or financial planner, it’s essential to find someone you trust. You want to feel comfortable with them and talk openly and honestly with them. Avoid any advisors who make you feel intimidated.

 

Key Takeaways

  • The younger you are, the more time you have to earn and build your wealth.
  • When you’re young, your habits are important and carry with you for the rest of your life. Now is the time to create financially healthy habits.
  • Budget, manage, invest, and save your money.
  • If you need expert advice and guidance, work with a financial advisor.

 

Next Steps

At 360 Financial, we want you to be confident that you have a financially comfortable future. We’ll help you create a plan, execute it, and monitor your progress so that you can be financially free in the future.

 

 

About the Author

Mike Rogers

Mike Rogers is the founder and president of Minnesota-based wealth management firm 360 Financial. As the founder, Mike’s priority is that 360 Financial always serves the clients with empathy, integrity, and honesty. This unique, client-centric approach allows the firm to help clients decipher between the things they can control and what truly matters.

In other words, Mike understands that money is not the end-all-be-all; instead, it’s the “how” that fuels the “why” to the question: “What’s important to you?”

Learn more about Mike.

 

Schedule a Call

At 360 Financial, our clients come first. You deserve personalized attention from an advisor at our firm. You’ll be happier and more confident to know that your needs always come first. Book a 15-minute introductory call with us today.


 

Read More Posts about Financial Planning

The 6 Steps in the Financial Planning Process

Financial Planning vs. Financial Advisor

 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Financial Planning vs. Financial Advisor

Posted on by Trone

Financial Planning vs. Financial Advisor

What’s the difference between a financial planner and a financial advisor?

Written by Mike Rogers, President and Founder at 360 Financial

When you start to get serious about pursuing financial independence, you’ll probably begin to wonder about the difference between “financial planning” vs. “financial advisor.” Similar terms can cause confusion, but we’re here to help you understand these terms and their differences.

 

TABLE OF CONTENTS

  1. What is Financial Planning?
  2. What does a financial planner do to help their clients?
  3. What designation does a financial planner have?
  4. What is the Difference Between a Financial Planner and Financial Advisor?
  5. What does a financial advisor do to help their clients?
  6. What designations does a financial advisor have?
  7. Do I Need a Financial Advisor or Planner?
  8. Do I need to find a financial advisor or planner locally?
  9. What is the cost of working with a financial advisor?
  10. Key Takeaways
  11. 360 Financial’s Financial Advisors

 

What is Financial Planning?

You have a financial goal but don’t know what steps to take to reach that goal. That’s where financial planning comes in: Financial planners help you create an actionable, achievable financial plan to help you meet your goals. A financial planner can help you reach long-term goals related to:

  • Budgeting
  • Saving
  • Retirement planning
  • Investing
  • Insurance

 

What Does a Financial Planner Do to Help Their Clients?

A financial planner creates long-term programs to help their clients reach their long-term financial goals. They help you chart a course for your life as it relates to your finances, analyzing every aspect—such as your savings, taxes, expenses, and investments.

Goals a financial planner can help you achieve include:

  • Saving to fund your child’s college education
  • Buying a new home
  • Saving to retire comfortably
  • Increasing profitable investments

One key aspect of a financial planner is that they provide targeted services. You’ll come in with a specific goal in mind, and they’ll help you reach that goal.

 

financial planner vs financial advisor

 

What Designation Does a Financial Planner Have?

Typical designations of financial planners include:

Make sure your financial planner has at least one of these designations before moving forward with them. The term “financial planner” is an unregulated umbrella term, so you’ll want to be sure that they have the proper designations before trusting them with your financial future.

Now that you have a full understanding of financial planners, we’ll dive into the difference between them vs. a financial advisor.

 

What Is the Difference Between a Financial Planner and Financial Advisor?

The difference is that while a financial planner helps you with a very specific goal, financial advisors are broader in their approach. Financial advisors typically offer the same services as financial planners, but they offer even more, including managing your investments.

Another key difference between financial planners vs. financial advisors is how you pay them. A financial planner will typically charge a flat hourly or annual fee, while a financial advisor often earns a commission on investments or products they sell. Some financial advisors earn a combination of commissions and flat fees, and others may charge a percentage of your overall portfolio per year.

Now, we’ll dive further into what exactly a financial advisor does to help you further understand the difference.

 

A financial planner will typically charge a flat hourly or annual fee, while a financial advisor often earns a commission on investments or products they sell.

 

How a Financial Advisor Helps Their Clients

While a financial advisor offers similar services to a financial planner, they also offer even more services, including:

  • Managing your investments
  • Acting as your stock broker
  • Advising and arranging insurance coverage
  • Strategizing estate planning
  • Making financial decisions
  • Executing your financial plan

While a financial planner will create your plan, a financial advisor will provide more hands-on services actually to help you execute that plan.

 

Designations a Financial Advisor May Have

If a financial advisor is working with the public, they are required to hold a FINRA Series 65 license. On top of that license, they may also hold other financial certifications that are similar to those of a financial planner. These may include:

  • Certified Financial Planner (CFP)
  • Chartered Financial Analyst (CFA)
  • Chartered Financial Consultant (ChFC)
  • Certified Investment Management Analyst (CIMA)

The main designation to look for in a financial advisor is the FINRA Series 65 license.

 

Do I Need a Financial Advisor or a Financial Planner?

Choosing between a financial advisor and a planner will look different for everyone. The right fit for you depends on what your individual needs are. Before we jump into how to decide, remember that your needs will probably change over the course of your life. While one may be the best fit for you now, you may want to switch in a few years.

A financial planner is best for you if you:

  • Want help developing a long-term financial plan, but don’t need help implementing that plan
  • Want to understand how your finances will evolve over your lifetime
  • Have gone through a major life change, such as getting married
  • Are nearing retirement
  • Need help managing debt, saving for college or retirement, or minimizing expenses
  • Need help strategizing about asset transfers

A financial advisor may be the best fit for you if you:

  • Are looking for help implementing your financial plan
  • Don’t want to or don’t feel comfortable making financial decisions
  • Are looking for occasional financial guidance
  • Need help with a specific investment strategy

Again, your situation will likely change over your lifetime, so your decision isn’t permanent. You can always change your mind in the future.

 

Do I need to find a financial advisor or planner locally?

No, you don’t need to find a financial advisor or planner locally. In fact, doing so can be extremely limiting. The best fit for you may be just a Zoom call away, so don’t be afraid to consider financial advisors or planners that aren’t local.

 

What is the cost of working with a financial advisor?

Financial advisors can charge for their services in a few ways:

  • Flat hourly ($100 – $400 per hour) or annual fee (ranging between $2,000 and $7,500 per year)
  • Commission on investments or products (a certain percentage)
  • A certain percentage on your portfolio (typically 0.25% to 1% per year)

It all depends on which financial advisor you choose, and how they charge for their services.’

 

Key Takeaways

  • A financial planner creates a plan, while a financial advisor creates your financial plan AND executes it.
  • A financial planner offers targeted services, while a financial advisor can help with more general financial services.
  • Choosing a financial planner vs. a financial advisor depends on your specific circumstances and needs, and these may change at any time.
  • Looking for a financial planner or advisor locally limits your options and may stop you from finding the best fit.

 

Next Steps

When you’re looking for a financial advisor, look for one that puts your needs first. At 360 Financial, we have a process centered around you, your goals, and what matters to you. We want to get to know you and your family, your financial goals, and any frustrations you have.

If you decide to work with us, we’ll mutually decide if there’s a comfortable fit—after all, we want to make sure your needs are being met. Book a 15-minute introductory call with 360 Financial today.

 

 

Top Financial Planning Articles

Want to keep learning about financial planning? Keep reading:

Financial Planning for Young Adults

Financial Planning for Retirement

 

 

About the Author

Mike Rogers, AIF®

This article has been reviewed by Mike Rogers, 360 Financial President and Founder of Wayzata-based 360 Financial. Prior to establishing the firm in 1995, he spent seven years with two of the nation’s largest investment firms. As a fiduciary, he utilizes his 30+ years of experience to plan and implement strategies tailored to address the issues and concerns of qualified retirement plan trustees, high-level professionals, and thriving business owners.

Mike holds the series 7 and 63 security registrations with LPL Financial. He served six years on the Benilde-St. Margaret’s Board of Directors, chairing the Investment Committee for many of those years. Through his membership in the Twin West and Wayzata Chambers of Commerce, he is able to better support business owners. And belonging to the LPL Financial Chairman Club and the Financial Planning Association allows continual support for the financial industry.

 

Schedule a Call

At 360 Financial, you and your financial goals come first, always. We’ll help you understand all the pieces of your financial puzzle, and work toward your financial goals for long-term success. Book a 15-minute introductory call with us today.

 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.