Yes, You Really Need a Financial Adviser

By Michael Garry

NEW YORK (AdviceIQ) -- Don't think that you can just pick up a book and do all of your financial planning yourself. Without the help of a seasoned professional, you can't make a complete financial plan.

Many popular books tend to oversimplify things -- and make it seem as if anyone, after reading 200 pages, can be completely prepared to handle all of their financial planning and investment needs. In some ways, the books do a service by raising your financial literacy and making you aware of scammers and investing risks. But if you stop there you deprive yourself of the hard-won expertise financial advisers can offer.

Take, for instance, the high standards placed on advisers such as myself who carry the Certified Financial Planner certification. The coursework for CFPs is thousands of pages long. We must complete a college-level program in financial planning and a study project on the topic. We also need to have three solid years of full-time work experience as advisers.

The requirements don't stop there. We still have to pass a killer two-day, 10-hour exam on insurance, investing, taxes, retirement and estate planning and professional ethics. In all, the average student spends 1,000 hours preparing for the CFP exam.

Our education is ongoing. To maintain the CFP certification, we have to attend 30 hours of continuing financial education every two years, two hours of which are on ethics and conduct.

Financial planning covers many subjects and each one is a distinct field of study. A book on financial planning can only provide at best a rough framework for decision-making. You need someone who can put it all together for you objectively, and that is where a financial adviser comes in.

You need to be informed about the channels through which they make their financial planning and investment decisions and the products they use to implement them. Most people don't have the time or inclination to stay abreast of the securities industry.

You need to open your mind and question what you heard. See if an idea withstands scrutiny before committing your hard-earned money to it. So many things investors take for granted are false, misleading or just plain nonsense. Example: the idea that home prices never fall. That myth inflated the bubble that damaged the whole economy not too long ago. More recently, the idea of putting your money into gold for safety hurt a lot of people when the metal's price imploded.

Everyone's situation is different, and even if the conventional wisdom makes sense for most people, it may not for you.

Reading a whole bunch of books on personal finance doesn't even bring you close to the expertise that you need to be an adviser. My firm, fairly typically, gives clients a personal touch and tailors its advice to their unique circumstances. Authors of financial books don't know anything about your situation and their advice might not fill your needs. Even if they could, there is too much to put into one book.

You have to look at your individual situation as a whole to make the best decisions for you and your loved ones. Your independent financial adviser can do this objectively and help you to determine your best course of action.

-- By Michael Garry, managing member of Yardley Wealth Management in Newtown, Pa.

AdviceIQ is a network of financial advisors that writes insightful articles for the public about investing and wealth management. All articles are edited by AdviceIQ's editor in chief, Larry Light. AdviceIQ certifies that all its advisors have no regulatory infractions.

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AdviceIQ is a network of financial advisors that writes insightful articles for the public about investing and wealth management. All articles are edited by AdviceIQ's editor in chief, Larry Light. AdviceIQ certifies that all its advisors have no regulatory infractions.

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