Chalk Talk: General Advisor vs. Retirement Specialist



Welcome to this week’s Chalk Talk. We’re talking this week about the different between a general advisor, or general advice financial advisor and someone who is a retirement specialist. And what we’re going to talk about now is, how these folks are compensated. So, let’s imagine, it’s pretty common that your financial advisor, general practice financial advisor, they’re going to charge you probably about 1% per year of your portfolio for their investment advice. That’s pretty standard, pretty typical. Now you might find one, they may charge you a little more, another might charge you a little less. But that’s pretty standard in the industry.

Well, what about a retirement advisor? Someone who specializes in retirement. What are they going to charge you for investment advice? Probably somewhere around the same 1%, so what the heck’s the different here? They’re charging the same number, and they’re delivering the same value. What’s going on? Well, what’s going on here is that one of these guys, or gals, ends up delivering a lot more value than just investment advice. That’s the difference.

So, here’s what I mean. When you talk to your typical advisor, general practitioner, they’re charging you that 1% a year for their investment advice. They’re done. That’s it, nothing more. That’s all you get. But if you talk to a retirement specialist, you get a lot more. I’m going to start making a list. For example, a retirement advisor is going to help you with your income planning. And when I say income planning, that’s going to include things like social security optimization. It’s going to include how do you structure your portfolio to get stable and predictable income. Where is the best place to take income.

This guy over here, he’s typically saying, “I’ll pull it from my choices, kind of when each year will make an identification of where to pull the money.” No. We’ve got a plan here. It’s a written retirement income plan. And during your retirement, that’s going to be important. What else?

Here is a big one. Tax planning. A retirement specialist is going to help you with your tax planning. Part of that has to do with income. Hey, which account? Do you want to pull income from your IRA, or should we pull it from your after tax account? We’re going to talk more about that in a little bit. But it’s not just that. What about Roth conversions? Are you doing Roth conversions every year? Should you be? Should you at least be looking at doing Roth conversions every year? What about your ongoing tax liability? Is that being looked at? Is your portfolio being managed in such a way to keep your taxes to a minimum? These are all related to tax planning.

What about the big HC? What does that stand for? Healthcare. Healthcare planning. When you hit 65, you’re going to be on Medicare. What’s the best way to manage your health insurance when you’re on Medicare? Is this guy going to help you? No. What about this one? Yeah, they’re going to help you. It’s important.

What about longterm care protection? That could be a big deal. Longterm care can be a big deal. How much help are you getting over here? None. What’s going on over here? They’re going to help you identify how much protection do you desire, how do you pay for it, what the best way to pay for it, what’s the best type of program to have. They’re going to help you look at it. They’re going to help you evaluate it.

And then the last part, EST. Estate planning. There’s probably room, let’s get that on here. Estate planning. Estate planning, your wills, trusts, beneficiary arrangements. How much help are you going to get from this person? Versus, how much help do you get over here? The reality is this. They might charge the same 1%, but boy do they deliver different value. And when you’re retired, if you’re nearing retirement, you’re going to need help in all of these areas. Make sure you pick the right advisor.

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