When to Call a Professional

Can you handle your investments on your own? Some can. Many can’t. That’s not to say that you don’t have the brains for it. You may simply lack the time to master the investing world. That’s when you should consult a professional financial advisor.

Many things in life are simple. On the surface, investing seems simple. You buy securities, they go up, you sell them, and you make money. But just because the steps are simple, it doesn’t mean they are easy. One time, I wanted to redo my bathroom. I watched some how-to videos on YouTube, and it didn’t look hard. I visited a Lowes and left with full confidence that I could do drywall by myself. That was a mistake.

That’s why, sometimes, it’s better to call a pro.

Just as I thought I could redo my wall, most people want to believe that, because investing is so simple, it must also be easy. Not really. Ever try trading currencies? OK, that may be too exotic. But how about managing the money in your 401(k) plan. You log on to your 401(k) account, and you get all types of information. Do you understand it?

For instance, you read how your fund did over the past year (badly), five years (great) and 10 years (so-so). What do you make of that? No wonder that a surprising and alarming number of people do not manage their investments.

About two-thirds of workers with 401(k) plans handle their own investments. More than half of those folks did not bother to manage their accounts in the last two years, according to a data analysis of 13 million participants in Fidelity Investments 401(k) plans across the country. That is just plain scary.

You cannot put your 401(k) on autopilot, either because of a lack of will or time. Making investment choices is not a once and done decision.  You monitor it along the way. If there is a mistake, or a better option, you change your initial plan.

However, most people don’t know what needs to be monitored. After my home improvement DIY, I can see there’s a mistake because the wall is uneven. I can ignore it or redo it. But on your 401(k), how do you notice a mistake? Is it based on returns relative to a benchmark? Why is there a mistake? Is it because of your own actions, perhaps allocating money to the wrong thing, or to events outside your control, occurring in the financial world?

What makes those simple things in life seem easy is skill, which take years to perfect, and the level of difficulty is in the eye of the beholder. If you are passionate about something, you are willing to put in the time and effort to obtain that skill. But many people don’t pay enough attention to their retirement nest egg because they lack the passion and expertise for managing their accounts, not because they don’t care about their retirement.

If you don’t have the burning desire to understand investment, maybe it’s time to use the phonebook and find help, just like I would on the remodeling.

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Joseph “Big Joe” Clark, CFP, is the managing partner of the Financial Enhancement Group LLC, an SEC Registered Investment Advisory firm in Indiana. He teaches financial planning at Purdue University and is the host of Consider This with Big Joe Clark, found on WQME and iTunes. He is a Registered Principal offering Securities and Registered Investment Advisory Services through World Equity Group, Inc, member FINRA/SIPC. Big Joe can be reached at bigjoe@yourlifeafterwork.com, or (765) 640-1524. Follow him on Twitter at @Big Joe Clark and on Facebook at http://www.facebook.com/FinancialEnhancementGroup.

Securities offered through and by World Equity Group Inc. Member FINRA/SIPC. Advisory services can be offered by the Financial Enhancement Group (FEG) or World Equity Group. FEG and World Equity Group are separately owned and operated.

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