It is a jungle out there in investorland.
So many investment choices, so many decisions on how much to invest and where, so much information publicly available courtesy of Google (NASDAQ:GOOG) and Yahoo (NASDAQ:YHOO), two among the hundreds of websites providing financial data and commentary.
It’s all a bit mind-numbing. It also prompts a question I get asked a lot: Do I need a financial adviser?
That’s as difficult to answer as any investment question, because the answer is generally not what anyone wants to hear — it depends.
But truthfully? Yes, you do, and in fact everyone should have one, whether that person is a trained and educated Chartered Financial Analyst or Certified Financial Planner, or a broker, brother, mentor or friend.
What everyone needs is someone they implicitly trust to provide not only advice, but also some guidance, honesty, hand-holding and scolding when necessary.
The younger you are, the more you need an adviser. Young people get bombarded with financial advice from every corner of their universe. Hey, some of it is great advice: fund your 401k, dabble a little at a time in stocks, invest in ETFs. However some of it is overwhelming and more difficult to implement than advertised.
More important, a tailored investment plan involves considerations a professional can help you work through — time horizon, investment risk profile, earnings potential and credit profile. It’s important stuff … and not the kind of thing young people might want to discuss with a friend, colleague, or even Dad.
The Fidelity or Vanguard representative on the phone can help you with opening an account, purchasing or selling securities, placing stop-loss orders — and he or she can generally point you in the right direction for information and advice from their own research department. That’s a nice start.
But let’s face it, how you use financial advisers — and nobody says you have to limit that number to one — can, and should, change over time as you get better at the game. What might start out as years of primers, one-on-one workshops and lots of lunches and phone or email conversations might end up years later as an occasional phone call checkup and once-a-year two-hour dinner to “go over the books.”
What starts out as mostly educational time turns into you taking the reins — but always with someone to look over your shoulder for guidance and a sanity check.
One more thing: It is NEVER too late to find an adviser. Check around, ask people you know (and trust) for a referral, and set up a meeting and an interview. Remember, hopefully they are going to be working for you, so get comfortable and confident, start slowly, and take it from there. Good luck!
Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing he did not hold a position in any of the aforementioned securities.