Advisor Timing: When Should I Hire a Wealth Partner?

By Raymond J. McCaffrey, CFA® | Published: December 2020

Do you like to “dabble” in the stock market? Get a “hot tip” at a cocktail party? Read about a new technology or promising new drug and decide to take a “flyer” on its stock? It may be fun to do this with extra cash you may have, but do you have a long-term investing plan?

In a recent WSFS Wealth Survey of consumers in the Greater Philadelphia region and Delaware, respondents believe mutual funds and stocks are a good investment today, while one-third say real estate and bonds are also worthwhile. One-third say U.S. Treasuries are not a good investment today, with three in 10 saying the same about commodities and real estate.

So many choices, some with conflicting recommendations.

Should I buy just one? How much of each? Which are riskier?

What if I told you all these investments, in the right amounts, could be part of a long-term investment plan depending on your age, risk tolerance, income needs and investment goals? This is where a financial advisor can help.

Financial advisors offer services that can help you chart a long-term investing plan to help meet your retirement goals or help keep and grow the nest egg you’ve already built. According to respondents of the survey, the primary reason to use an investment advisor is “because they understand the markets better than I do.”

This makes sense, as financial advisors are following the markets every day. Financial advisors are trained to help clients invest in stocks, mutual funds, bonds, and other investments. They earn designations such as the CFA and CFP that signify knowledge in the world of investments and financial planning, and any financial advisors take continuing education credits to stay current on new developments in investments and planning.

Despite the importance of a financial advisor, only 48 percent of those not currently using one say they are likely to use one in the next year. The WSFS Wealth Survey found that men (57%) without an advisor are more likely than women (32%) to use one soon. Both men and women can benefit from the knowledge of a financial advisor, not just for investments, but for planning how much to save each month so that money will be available for long-term medical needs and retirement.

When we are young, we are less concerned about retirement, but as we age, saving for retirement becomes more important. Eighty-six percent of respondents to the WSFS Wealth Survey plan to use their investments for retirement. The most likely group to use a financial advisor is 35-44-year-olds, with 80 percent saying they are likely to do so.

This makes sense as people become more serious about the future as they accumulate wealth, marry and form households. As we pointed out in an earlier article the sooner you start to save, the better your chances of reaching your financial goals. While we recommend starting to save sooner, it is encouraging to see that 80 percent of 35-44-year-olds are planning for retirement.

Similar to the importance of feeling comfortable sharing your health issues with your doctor, you need to be comfortable sharing information with your financial advisor. Your financial advisor is your wealth partner. If you choose the right one, they will keep you financially fit into your golden years.

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About the Author – Raymond J. McCaffrey, CFA^®
Raymond J. McCaffrey, CFA^® is the Chief Investment Officer and Managing Director for Cypress Capital Management, a subsidiary of WSFS Financial Corporation. Ray has over 30 years of investment experience managing institutional, mutual fund and high net worth accounts. Ray graduated, cum laude, from Villanova University with a B.S. in Economics. He received an M.B.A. with a concentration in Finance from Carnegie Mellon University Tepper School of Business.

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This article is provided by Cypress Capital Management, LLC ("Cypress" or the "Firm") for informational purposes only. Investing involves the risk of loss and investors should be prepared to bear potential losses. Past performance may not be indicative of future results and may have been impacted by events and economic conditions that will not prevail in the future. No portion of this commentary is to be construed as a solicitation to buy or sell a security or the provision of personalized investment, tax or legal advice. Certain information contained in this presentation is derived from sources that Cypress believes to be reliable; however, the Firm does not guarantee the accuracy or timeliness of such information and assumes no liability for any resulting damages.

Cypress is an SEC registered investment adviser that maintains a principal place of business in the Greenville, Delaware. The Firm may only transact business in those states in which it is notice filed or qualifies for a corresponding exemption from registration requirements. For more information about Cypress’ registration status and business operations, please consult the Firm’s Form ADV disclosure documents, the most recent versions of which are available on the SEC’s Investment Adviser Public Disclosure website at www.advisorinfo.sec.gov. Cypress is wholly owned by WSFS Financial Corporation.