Investors with more than $200,000 in savings and investments

Ben Blake, CFP | Portfolio Manager at Parsec Financial
As your investments build to this level (which it most assuredly will over time if you take the right steps and have patience!) and as we age our financial picture becomes even more complex. With larger sums of money and the more complex life situations that will arise in the years ahead at this point, it may make sense to employ a full-time financial planner. Having a financial advisor will provide you with a concrete long-term financial plan for your path to retirement, a strategy for college savings plans for your children, strategies for buying life insurance, a counsel for tax strategies, and a way to discuss and plan for many other events with your investments that are no longer generic but detailed specifically for your situation.

Generally, young professionals do not have enough money to meet the minimums a financial planner requires, and our financial picture is not complex enough to merit paying someone to help us work through it. As you approach $100,000 – $200,000 in investable assets then it may be time to find someone with whom to start a long-term financial relationship.

It is still key however to keep your costs low! Look for a financial planner that is “fee-only,” or one that charges for their services with an annual fee stated as a percentage of your assets. Anything above 1.00% annually is too much! The importance of a “fee-only” planner is that you don’t want an advisor that charges for their services every time you place trades or one that will be consistently trying to sell you financial products to increase their compensation. In a fee-only arrangement, your advisor will benefit when you benefit – if your investments see long-term success then your advisor will benefit as well!

Look for an advisor that is a “Registered Investment Advisor” (RIA), which means the advisor registers with the Securities & Exchange Commission as an advisor who holds a fiduciary duty to their clients. Serving as a fiduciary means that an RIA is required by law to work in your best interests at all times. This way you know that they are consistently providing you with the best solutions, for you! Almost all RIAs are fee-only providers, but not all fee-only providers are RIAs.

Also, look for an advisor that holds a professional designation. This shows that they are dedicated to the field of financial planning and have serious experience that will likely allow them to provide you with the best advice. The most reputable designations (among many out there) include the Chartered Financial Analyst (CFA) and the Certified Financial Planner (CFP).

Perhaps most importantly is that you should look for someone you get along with and you can trust and feel comfortable with when talking about very detailed aspects of your life – be it financial or personal! It is critical that you can and will talk to your advisor about anything that impacts your financial picture or about anything that you want to achieve so you can modify your finances to reach that goal.

Talk to your friends and your parents and see if they will refer you to an advisor that they have had a great experience with (as long as they are an RIA and fee-only). Or, use the following website www.investmentadvisorsearch.com to search through almost 30,000 RIA offices for an RIA-based on location and how much money their firm manages.

Parsec Financial Management, Inc., the presenting sponsor of this site, is a fee-only Registered Investment Advisor with North Carolina offices in Asheville, Charlotte, Tryon, Winston-Salem and Pinehurst. However, we work with clients across the country and we would be glad to talk to you about your specific situation at any point along the way in your career. Visit parsecfinancial.com/emerging-wealth to learn more.