NAIFA has long touted the personal, often life-long, relationships that our members develop with their clients. NAIFA advisors understand their clients’ financial goals and needs better than anyone. They have to, in order to help people adjust to life changes – getting married, having children, experiencing career advancements and setbacks, or suffering illness or death, to name a few – that can affect their financial security and change their long-term goals.
National Public Radio’s Morning Edition program earlier this week ran a segment with Washington Post personal finance columnist Michelle Singletary entitled “U.S. workers lack confidence to manage retirement savings.”
We were pleased that Singletary encouraged people who are confused about retirement planning to seek professional financial advice and to look for an advisor who will consider their individual situation. She said it is important to find an advisor who will ask personal questions and get to know you personally.
Singletary said that someone looking for a “very specific plan to you that’s long-term, that doesn’t just include your retirement but insurance needs and other things” would be well-served by an advisor. These are, she says, “professionals who can look at everything you have and help you come up with a plan.”
Unfortunately, she went on to imply that consumers must pay upfront fees to get this type of service. Of course, many NAIFA members who do not charge fees, but work on a commission basis, provide a strong alternative for many people.
Research indicates that many fee-only advisors cater to wealthier clients. Similarly, surveys have found that many middle-market consumers prefer paying commissions if and when they decide to purchase financial products rather than upfront fees.
We appreciate and echo Singletary’s advice that consumers should seek help from advisors interested in helping clients based on their unique situation and goals. However, we strongly disagree that consumers need to pay an upfront fee to get the help they need.