Do investors still need financial advisers?

Despite the amount of information available online, from the media and investment groups and the ability to place individual trades, the answer is still yes.

There is still a big need for a third-party investment specialist, but the relationship has changed.

Although almost all investing can be done on one's own these days, that doesn't mean that investors should do this themselves. In fact, the go-it-alone path can lead to financial distress.

In the old days, people typically finished school and went to work and were employed by one to three companies over their lifetimes. Meanwhile, professional money managers worked at companies to create, build and maintain a pension program to take care of employees during retirement.

Then that all changed. Companies wanted to save money and shift the burden of risk to the individual through 401(k) plans, leaving most people with less income in retirement, higher fees, greater risk and less financial guidance.

A human resources representative is no substitute for the guidance of a professional adviser.

However, advisers must behave and work differently with investors than they did in the past. It is now more of a team effort to get to accomplish financial goals.

And with all the information available, advisory clients will want to provide input on their finances.

"Modern investors are looking for more than just return on their investments," said Brad Pries, founder and chief executive of Minneapolis-based Sawtooth Solutions, which offers a web-based platform for advisers.

"They are looking for a road map on how to plan their lives and careers, which encompass their finances and their families," he said. "Additionally, the modern investor is aware that the world is complicated and often treacherous, which impacts the decisions they must make."

Advisers are seen as sounding boards for ideas, a research assistant and someone with connections to other investors and professionals. This provides necessary insight and ideas to a working relationship.

Those advisers who only focus on numbers will find themselves competing against super computers and having short-term relationships with clients.

The biggest reason to use the services of advisers is because most investors have limited time and the direction that advisers can provide is more important than information.

"Advisers don't need to be an expert in everything, but they do need to know the expert in everything that is important to the client relationship. Investments are simply one aspect of a strong relationship," Pries said.

"A proper relationship should logically extend into total wealth planning, taxes, career trends, children's education aspirations, lifestyle and retirement to accommodate the goals of the client," he said.

Advisers add the most value not by doing all the talking but by listening.

Excellent communication of strategies that work within the necessary goals and time frame will lead to longer-lasting relationships and happier clients. It can also lead to a bigger portfolio.

Over the next 30 years, the U.S. will see the largest transfer of wealth in world history as seniors pass money to baby boomers and boomers pass money on to the next generation. There will always be money to manage and people to help, but advisers who stay up to date on what clients want will prove invaluable.

This article is commentary by an independent contributor.