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When Looking for a Financial Advisor – Focus on High Monthly Income

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Key Takeaways:

  • There are different types of financial advisors depending on your requirements; Robo advisors, traditional financial advisors, online advisors, and those focused on helping you generate high monthly income.
  • Robo-advisors are lower cost and are powered by software and artificial intelligence. You cannot talk with a real person. Traditional financial advisors can be fee-based or commission-based.
  • We like advisors that help you generate high levels of monthly income with low risk, without touching your principal.
  • Find a curated list of retirement advisors on our site, specializing in high monthly income strategies (covered calls, downside protection, bucket strategies, etc.): Go to retirementmonthlyincome.com, scroll down to “consult with a top financial advisor”, enter your contact information for a free 30 min consultation.

Fee-Based vs Commission Based Advisors

A fee-compensated advisor collects a pre-stated fee for their services, which can include a flat retainer or an hourly rate for investment advice. A fee-based advisor charged with actively managing a portfolio would likely charge a percentage of the assets under management.

A commission-based advisor’s income is earned entirely on the products they sell or the accounts that are opened. A hotly debated topic is whether commission-based advisors keep the investor’s best interests at heart when selling an investment or security.

Understand the different types of financial advisors

Robo-advisors

It used to be that hiring a financial advisor meant that there was a person that you would be talking to.  These days, robo-advisors are prevalent and they cater to those that are looking for quick and easy 24/7 online financial planning.  As the name implies these robo-advisors are not human but are instead software powered by artificial intelligence.  The way they work is that you enter in your personal information and they will output a retirement plan based on your needs.  Think of these as the next step after utilizing the retirement calculator.  Fees are very low at around 0.25% of your balance.  Some don’t even have account minimums so this is easily the most affordable on this list.

Granted, they’ve come a long way over the past decades, but they are limited in functionality.    They are only as good as what you enter so if you aren’t experienced in or intimidated at looking over numbers, especially as it relates to budgeting, income expectations, or portfolio management look elsewhere.  A personal connection cannot be made with robo-advisors so if there are any personal events or situations that you factored in into your retirement planning, they would not be able to provide any guidance.  Sofi and Betterment provide robo-advisor services that are all considered industry-leading so make sure to start your research there.

Traditional Financial Advisors

Certified financial planners, registered investment advisors, financial consultants, stockbrokers, and wealth managers are all examples of traditional financial advisors.  It isn’t uncommon to see financial advisors hold multiple titles as much of the work overlaps.  For example, a certified financial planner may also be active as a retired investment advisor and so on.

Expect to meet face to face with someone, usually at their office during regular business hours.  You may prefer this route if you value personal feedback and recommendations from experience from a human personal advisor.  However, they are limited in their service because they can only advise based on their experience and recommendations.  Not all personal advisors are created equal so you’ll need to do some due diligence and research in your area who you want to work with.  Some financial advisors create a financial plan for you and all you have to do is execute it.  Others will handhold you through the process while some will offer their services for free, meaning they consider their time volunteer work.  The choice is yours but you’ll need to look for the one that applies to your needs.  Look into NAPFA or Financial Planning Association to get you started.

When you do find the right one, it shouldn’t surprise you that they will command high prices.  Their requirements and fees will vary so it’s important that you factor this in while you do your research.  Some will require a high minimum balance just to get started.  For example, they may require that you have at least $250,000 in assets in your account before they commit to working with you.  Aside from the high cost, you do get what you pay for:  specialized service, advice based on personal experience, and a person that can empathize with you.

Online Financial Advisors

Right in the middle between robo-advisors and traditional financial advisors are online financial advisors.  Consider this option as the “best of both worlds”.  You get the automated investing planning that robo-advisors provide while having customer support from an actual human financial advisor.   The personal connection you make with traditional financial advisors may not be present with this hybrid option because there are usually teams of financial advisors behind the scenes.  Some services do offer personal advisors that are dedicated to your account but you’ll have to do some research to find these.

Conclusion

  • We like advisors that are fee-based (so there is no conflict of interest) and are experts in helping you generate high levels of monthly income with low risk, without touching your principal.
  • To find top retirement advisors specializing in high monthly income strategies, go to retirementmonthlyincome.com and scroll down to “consult with a top financial advisor”, enter your information and start with a free consultation.

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