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A Big Picture View for Retirement: Benefits of Long-Term Financial Planning


Many people who are planning for retirement choose to use a fee-only advisor because there is more transparency, no hidden fees, and less chance of bias or conflict of interest. For the same reasons, many outside sources recommend using a fee-only advisor for wealth management and retirement planning.

While knowing your advisor’s fee structure is an important consideration, it’s not the only one.

Some fee-only advisors receive an hourly or flat fee for their planning services, while others charge based on “assets under management” (AUM). In other words, a percentage (often 1% per year) of the investment account value.

When weighing your options for a fee-only financial advisor, look for someone who fits with your values, goals, and financial needs.

The Right Advisor for Your Stage of Life

How many 30-year-olds do you think are worrying about legacy planning or annuities? Our financial focus naturally evolves as we move through the phases of life: graduating from college, starting a family, buying a home, later careers years and eventually, retirement.

What makes sense in your 20’s, 30’s, or 40’s won’t necessarily be so as you approach retirement. Choose the right type of financial planner to accommodate life’s changing needs.

For someone in the early career years, for example, an hourly planner may be a great fit. These financial planners charge based on the time they spend providing advice, without requiring an ongoing commitment. Consequently, the advice they provide is usually focused on a particular transaction or problem like:

  • Paying off debt
  • Buying a car
  • Setting initial savings habits

For this type of financial planning, an hourly planner allows you to get targeted help in a cost-effective way.

Approaching Retirement? Find a Financial Advisor Who’s a Partner, Not Just a Service Provider

Some people think of retirement planning as a single financial transaction—set your goals, reconfigure your investments and you’re done. That couldn’t be farther from the truth.

Planning for something as important as your retirement requires looking at the bigger financial picture. Unless your financial advisor has a clear understanding of your “Financial Big Picture” he or she can only give general advice. For more in-depth matters like retirement planning, it makes more sense to think of your financial advisor as a trusted counselor, not a one-and-done service provider. Planning for something as important as your retirement requires looking at the bigger financial picture.

Although advisors who work on a percentage-based model or annual retainer require a long-term commitment, this structure allows them to address a more diverse set of financial needs:

1. Behavioral Coaching

Working with a long-term financial advisor creates an environment that helps prevent you from making emotional mistakes. Abandoning the markets when performance has been poor or chasing the next “hot” investment can cause significant wealth destruction. That’s why having a trusted advisor - one without conflict of interest - is key to helping you achieve your financial goals.

2. Financial Plan

At Wealth Legacy Institute, we believe long-term investment success begins with a financial plan. The plan provides a foundation for making financial decisions and helps keep you on track in the face of financial “noise” and your objectives at the forefront.

3. Asset Allocation

Asset allocation is one of the most powerful tools we use to help you achieve your financial goals while at the same time manage investment risk. Most investors know they need a diversified portfolio, but determining the exact asset mix is a bit more of a mystery.

Taking your individual risk tolerance and time horizon into consideration, we build globally diversified, low-cost and tax-efficient portfolios that give you exposure to more than 9,000 individual stocks and 7,500 individual bonds.

4. Rebalancing

As a portfolio’s investments produce different returns over time, a portfolio may deviate from its target allocation. Rebalancing involves periodically buying or selling assets in a portfolio in order to realign with your objectives. Our rebalancing strategy goal is to minimize risk, rather than maximize return.

5. Asset Location

The objective of asset location is to minimize the amount of tax you pay on the assets in your investment portfolio. Our strategy uses a mix of taxable and tax-deferred accounts to maximize tax efficiency and preserve more of your wealth in the long-run.

6. Withdrawal Order for Spending

One of the biggest decisions you have to make as an investor is how and when to spend from your retirement investment portfolio. We work to minimize the taxes paid over time and increase your wealth, allowing you to maintain a sustainable income over the course of your retirement.

Looking for a financial advisor to create a customized financial plan based on your values, and help you stick to it when the going gets tough? Contact us today.

Denver Fiduciary Guide

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