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By Jason Stipp and Christine Benz | 06-05-2013 02:00 PM

When Professional Guidance Pays Off

Even if you're a staunch DIY investor, a financial professional can provide very useful input for retirement planning, estate planning, taxes, and more.

Jason Stipp: I’m Jason Stipp for Morningstar. We have an active group of do-it-yourself investors on Morningstar.com, but even the most self-reliant will sometimes need to stop and ask for directions. So when should you seek financial help? Here to offer some tips is Morningstar’s Christine Benz, our director of personal finance.

Thanks for being here, Christine.

Christine Benz: Jason, great to be here.

Stipp: You say that there are some people who turn over all their money to an advisor. There are some people who do everything themselves, but you don't have to be in one of those polar camps. There is some middle ground there.

Benz: There is, and specifically, I think you might look for an advisor who charges either on a per-project basis--so, they might say, "Well for $2,000 I’ll do your retirement plan"--or on an hourly basis. And I think that can represent a really nice middle ground for a lot of people. So, even if you are extremely in the DIY camp, there may be points in your life where you do need just kind of an extra set of eyes or some sort of specific help with a specific problem.

Stipp: And there actually are some well-known financial advisors that do use that hourly model, which can be a good business model for cases like that.

Benz: It definitely can. It will tend to be more cost-effective than having someone take a percentage of your assets on an annual basis. Again, there are some people who need that kind of comprehensive help, but if you're someone who just needs kind of a check-up or a second set of eyes, that hourly model will be more cost effective. One firm I often recommend--and I have no vested interest in them and certainly can't vouch for the quality of each of the planners--is Garrett Financial. That is a national network of advisors who nearly all work on an hourly basis.

Stipp: Given that there are some middle-ground options for folks to seek financial advice for specific things, you have a list of some areas that you really might want to put on the short list of when you could reach out to an advisor and it could really help out your financial plan. The first one is the all-important aspect of getting ready to retire.

Benz: Absolutely. I talk to a lot of retirees, Jason, and what they say is that it’s really exhilarating, but it's also scary because they've had this lifetime of accumulating, where they’re building, building, building their savings and now they're looking at a day where they may need to begin drawing down those assets. So, I think getting another set of eyes on your plan on the assumptions you're making about it, on your asset allocation, your withdrawal rate, can be really, really comforting at that particular time. Just have someone to kind of corroborate what you've done, or maybe poke holes where they need to be poked, just to have someone to take another look at what you're doing.

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