Do we need more Advisors?

By Mark Folgmann

I recently attended a 401(k) Fiduciary Symposium at Boise State University hosted by Matthew Hutcheson the nation’s best know Independent Fiduciary currently working with both Congress and the Department of Labor on improving America’s retirement income. I had the pleasure of sitting next to Sheryl Garrett founder of “The Garrett Planning Network.” This is a group of fee-only financial advisors that have a very unique business model and have over three hundred advisors around the country that help individual clients on an hourly basis. This advice can be purchased in blocks of time depending your level of complexity and the amount of time you need. You could purchase two hours to review you 401(k) and asset allocation while also updating your insurance needs. Once this is completed you may not need additional help till 2011 at which time you come back in for two or three hours of review. Since the advisors are paid by the client on an individual basis they have eliminated most conflicts of interest and are able to deliver quality advice because their only agenda is to help the client and provide more value than what they charge. They spend time educating clients so they can make smarter financial decisions with regard to their overall financial situation and are always available if you get stuck or need additional help.

With so many jobs leaving Michigan, this is an area where many jobs could and should be created. Traverse City is an excellent example of a place where an hourly planner is desperately needed. It’s my belief that the majority of the country should hire and do business with an hourly planner. Unfortunately there is not one available in our area and I believe we could support at least four in Traverse City alone. Most people’s situations are not so complicated that they need ongoing comprehensive analysis and care. Normally you must acquire significant assets before this level of care is needed and usually would be in excess of $750,000 if not $1,000,000. In my practice I have noticed that there is a certain level of assets where many people become uncomfortable managing their own investments. I believe most of our workforce (at least 95%) could benefit from financial advice delivered on an hourly basis ordered up when life and situations change. There are too many salespeople whom are marketing products under the title of “Financial Advisor or Financial Planner” and not nearly enough true advisors whom do not sell products. The question is “Are we ready to write a check for advice or will we continue believing we are getting trustworthy advice for free by people selling products?” Most still believe they are not paying fees if they don’t write a check but in reality you always pay the bill. I hope Sheryl will find an advisor for our community and I will do my part to support that effort.