When Should You Hire an Advisor?

Okay, everybody. Welcome back to the Knoxville Financial Q&A show. This is episode 4 and I am your host Paul. I'm Brian. And today we're going to answer a question that is basically in three parts. And so the first part of it will be when should I hire a financial adviser?

I mean there's lots of reasons to hire a financial person. You know, the biggest thing is just we all need accountability. One of the things that you think about or I think about, I correlate it to like being in fitness and I think about people going to the gym. You know, if you want to lose weight and get fit or if you're trying to build a bunch of muscle mass or you're trying, you know, you have a specific goal, having somebody to help keep you accountable, it I think far surpasses everybody knows what they need to do, you know, lift weights or do their specific exercises, you know, there's so many YouTube videos or so many access to information, but having that person to help keep you accountable, I think makes a massive difference. Yeah. So, we're basically like the gym trainer. Yeah, for your money, give me call me coach.

I mean a really quick simple answer I think would be if that thought even crosses your mind whether you need to hire one or not, you probably maybe you might need to hire one. I think another thing another time that might be appropriate would be especially if you're not used to investing and you come into a big inheritance or sale of a business or something like that where you just come into a large pile of money and you don't really know what to do with it from a tax standpoint or investment standpoint.

You nailed it. I was going to say tax efficiencies matter so much. You know a lot of that that's that is another thing I guess tax efficiencies across the board. I mean you know having something that has high turnover you get subject to taxes. So like you know when you make $2,000 it's not that big a deal but if you make 20 30 40 50 grand in the year on your investments because you have a million dollars or a half million or 100,000 that matters. But yeah I you know the other thing too which I'd love to find the data I don't remember the data point but I've seen that that you know it's behavioral finance is what it comes down to but it comes down to most people always exit at the wrong time and so that time in the market beats timing the market when everybody tries to time the market and it's it just rarely works in their favor. I agree. It may work once or twice, but I think another scenario would be you're approaching retirement. You've been investing in your 401k the whole time and you didn't really need financial advice. Maybe sometimes the 401k provider will provide that. Most of the times lately, not so much anymore. And so you're getting close to retirement and you got this big pile of money in your 401k and you don't know what to do after you retire. How where's it going to go? How to manage it? Well, sometimes even before retirement, we look at like the rise of inservice distributions. You know, people who are 50, 52, 53, 54, 55, you're getting really close. You've built this pile of money. And if that's all you've ever had is that pile of money there, you know, because of the 2008, we've built in those inservice distributions where the plan stays active, everything stays the same. You can stay contributing, but you have the ability to remove all of your money out and go get professional management. So you can try to get that active management that you know when the market dips you're not quite as low you know and so that there's I think that element there just matters significantly too. It definitely matters especially since I think maybe the very first video that we talked about a lot of the 401k plans are now just target based. Oh yeah based funds and so you you know that's not really the best case scenario. you have the ability to still work, still keep the same 401k, still contribute, take some of those assets and have them actually professionally managed with more much more diversification.

Is there any other reasons you can think of somebody might want to hire somebody?

Yeah, I think when your DIY approach is no longer working you might actually be costing yourself some money.

So, can you think of any other reasons?

You know, I think if some major life decisions happen. I mean, I I have a lot of clients get come to me and ask this question, too. You know, like, I have some money saved up. I want to buy a house. Should I put more money down or should I borrow or should I just do 100% financing? You know, I think a lot of that comes down to can your money out earn the what it costs. I think some of that matters too, having somebody a be able to break those down because a lot of people get stuck and I've seen this way more times than I care to admit, but a lot of people get stuck in that I just don't want debt or I just don't want to have a payment. And so I think a lot of people will make not necessarily the best decision financially just to avoid the debt or just to avoid but you know prime example when we had mortgage rates at like two two and a half whatever percent all the way down at that low now you can get a CD for three or four or five if you came to me and said should I pay off my mortgage or should I you know invest this extra money. It’s is a question we get all the time. Yeah, keep the mortgage and invest. And so I think, you know, a lot of a lot of people probably could find those answers with whether AI or anything else, but it comes down to if you've got somebody that you can pick up the phone and call, nine times out of 10 that will happen way more than going to Google for something. Oh, definitely 100%.

All right, so the next question, the next part of this question would be, do you have an account minimum?

Yes and no. We don't publish it on our website and we do that on purpose because everybody's situation is not just based on how much assets they can bring us to manage. We don't Brian and I don't work like that. We do gosh I mean we do a lot pretty much pro bono, right? Yeah. And and the part of that reason is because we love doing we what we do and we love like it's goodwill essentially. And sometimes basically I mean we can't work with everybody. That's just the way it is. Some people there's nothing you could do for them. But even those people we'll sit down with them and spend some time with them and try to give them the best advice possible. And in return, and I've had this happen to me personally, because we've done taken that step, we've received referrals from that person even though we couldn't even help them, but they knew that we had their best interest in in mind. And so, part that's mainly part of the reason we don't publish a a minimum. Yeah. Because every situation's different. You know, some people starting out have substantial, you know, goals and substantial income. Yep. And just because you don't have that amount of money, you shouldn't get advice. It just seems backwards to me.

Yeah. So, in Knoxville, I'm I'm fairly confident with this number. I I didn't do any research on it, but I'm I'm fairly confident in it. But I think most advisers their minimum would be 500,000 just just to talk with them. And that's great. I have no problem with that. But there's people I mean we just ran across a couple that they're both high income earners. They're just now they have low debt. They're just now able to put away a bunch of money. We gave them advice. They came back, took our advice, and you know, invested 50,000 to start and putting $5,000 in per month. Well, let's say we had 20 of those clients. So, if we had 20 of those clients doing that same thing, that's 1.2 million in assets that we'll be managing per year that we didn't have before if we put $500,000 on our website. And these are people that we want to work with. And just because they don't have $500,000 now, we're able to guide them to the point where we're giving them advice through this whole entire time, they're going to be great clients for a long time. Yeah. Right. And so, why would we not want to work with people that are high income earners, that are willing to take our advice and and invest the amounts that we tell them to, it just makes no sense.

So, we don't publish a number. There is no number for us. It's client dependent which what you just said matters more than anything. I think the biggest thing is we've all been here so this has nothing to do with financial stuff but you know people ask for advice you give advice and it could be sage advice and they don't follow it. I think that comes down to this this goes back to that like who could you help or who could most benefit the people that are genuinely looking for help with their situation that are willing to take advice and apply it. I think that is the summation of everything. I think whether you got $2 or two million, if you need some help and you're willing to apply advice, we're looking for you. Exactly. 

And then the last part of this question is, who can we serve best? I think that would be what I just Yeah, pretty much. I mean, in all honesty, like the the big majority of our clients are people that are getting close to retiring, like we mentioned earlier in the video. People that are getting close to retiring that have a big pile of money in a 401k and they don't know what to do with it. They need it managed after retirement or like you said, inservice distributions before retirement. Yeah. I mean, I see that. I see, like you said, inheritances. I see people that have gone from, I guess, what I would call 0 to 100. So, you get some, you know, people right out of school or people that got maybe got a really good career. They went from bartending to, you know, being a not saying a CEO, but you get the idea. And so, we've seen that with musicians and and, other professionals, but, you know, you go from making hardly any money to now making money. Now, what do I do? I think trying to damage control on everybody's situation is far worse than starting it correctly. And so getting that that everything in order to where there's a benefit via taxes and all the other things and work your way into it is better than showing up with the million bucks or the 2 million bucks and then it's like here's my mess, help me clean it up. I think another situation where someone can benefit from us would be if your financial situation is very complex and we have the ability here to bring in a CPA, bring in an estate planning attorney and we all meet in our conference room and at least for the initial consultation and then we're all on the same page right from the get-go. There's no making a whole bunch of different phone calls back and forth and we're all trying to communicate with each other. That's something that we, you know, we focus on a lot is being Brian and I are like the quarterback and then we have this this team of professionals that that help us navigate really complex situations. So, if if that's you, we're the answer quite honestly.

Yeah. Sale of businesses gets really messy. You know, what you said before is when you kind of come screeching into retirement with a very large 401k is not really that complex. But if you've got thrift savings plans, numerous IRA'S, you know, inheritance accounts, and all these old annuities from those inheritance accounts or inherited accounts, I mean, yeah, you can somebody can get lost in the weeds pretty quick on trying to decipher through all that and retire. All right, I just thought of something else. when it when it comes to account minimum probably should have thought of this during but you know we get certain investment vehicles that have limitations and so sometimes it's not so much as an account minimum as much as it is an investment minimum. Rules that are set forth from our what we call a custodian or rules that are set forth in our trading platform all require us to fit within certain guidelines. So, you know, this goes back to like diversification and everything. You know, if one position or two positions or three positions that we really like may require specific amount of money. So, it's not so much a a minimum, but in order to utilize the strategy that we want to utilize requires a certain amount of money. So that's something to think about, too. You know, we may be able to talk a great game when we're having the conversation, but if you don't have enough money to participate, it it kind of kind of stinks a little bit.

Yep. So, I think that sums up this video. One thing I wanted to mention is that a lot of people if they're trying to find our videos or whatever, and they go to our website, which is iws.one. some people might type in IWS.com. So what we have done is created a new domain name just to redirect to the page where all the videos are hosted on. And so that domain name is wealthyknox.com and that'll take you right to all the videos. Are you going to put it up right here? Mhm. It'll be right there. It'll be right there on this wall. All right, guys. Thanks for watching and keep sending your questions in. We appreciate it and feel free to comment, like, subscribe, whatever you want to do to our channel. But for the most part, we just want people on our website to just watch the videos and not have to do any of that stuff. We do want questions though. So send your questions. Send your questions. So with that said, we're wrapping it up, right? Signing off.

Signing off.