Just how concerned should you be about using the services available for financial planning or investment planning ?
One will get way down deep in the weeds for you(financial planning) ; the other may pass over a lot of the substrata and just provide minimal services (investment planning).
A new research study highlighted in the American Association of Individual Investors (AAII Journal), and compiled by Cerulli Associates in their annual, “Quantitative Update: Advisors Metrics” reports:
…the research firm (Cerulli) found differences between the types of services advisers said they provide and the services they actually do provide.
Over half (59%) of the advisers proclaim they do indeed give their clients financial planning services. However, things are not always what they seem to be. A lot can be lost in translation.
Funny, but the report concluded that a whopping 56% of those folks responding were classifying themselves as investment planners.
The advice you get from your broker, for example, is generally considered in the ‘investment planning’ sphere. Many of the suggestions offered up by them has to do with just where to put your money. Picking funds to zeroing in on stocks and bonds comes under that category.
Taken a step further, the investment planner usually offers you a road map on how best to build up your assets.
So what size of portfolio does the investment planner generally work with? The AAII Journal reports:
…investable assets of between $500,000 and $2 million comprise the largest pool of potential individual investor clients…(and) are not in need of estate, charitable, business planning or private banking services.
The complexity of your financial needs will dictate what financial professional will best serve your overall situation. However, the field of investment advisers gets a little murky only because of the lack of standards defining the services of investment planning and financial planning.
Like with most business transactions you need to be up to speed on just how your adviser is being compensated: over 60% of investors zone out when it comes to this very important question.
According to Cerulli, if your portfolio balance is $750,000, the average fee you’ll be paying will be 1 to 1.25% annually.