I’m looking for a financial advisor who can help me manage my tax-advantaged workplace retirement plan. Finding such a person is turning out to be a real challenge. Some are too expensive (for me) and some don’t take a holistic view of my needs, including goals, risk profile, sources of income and so on. What are my options?
-Anne
I know it can be frustrating when you want help but can’t find it. The good news though is that the type of help you are looking for is available. There are software services that allow advisors to manage 401(k) accounts on your behalf. Some advisors also may be willing to help you on an hourly basis. (And if you need help finding an advisor, this tool can help you connect with potential matches.)
Managing Your 401(k) or Other Workplace Retirement Accounts
Advisors are normally only able to manage accounts they hold at their own brokerage firm or custodian. They don’t have the ability to access accounts at other financial institutions, which are referred to as “held away” accounts. They can’t place trades, see your information or deduct fees for these accounts.
I hope it’s obvious that you shouldn’t give them your login credentials to do it for you. However, most advisors wouldn’t anyway. That’s because it would trigger custody rules and open them to a whole host of regulatory issues.
If you want help managing your workplace retirement plan, you may still be able to find an advisor who can do it. There are platforms out there that provide a secure third-party connection to allow an advisor to see your account information and place the necessary orders without crossing that custody line. Pontera is the one service that comes to mind, but there may be others. Advisors who use it have to pay for the service. They’ll either absorb the cost or pass it on to clients.
Not all advisors use a service like this, which you have clearly discovered. From my experience talking with industry peers, it’s not widely used but it’s also not necessarily rare. You may be able to find someone by simply calling around to advisors. Ask advisors if they use Ponterra or a similar service in order to manage workplace retirement accounts. (And if you need help finding financial professionals, this tool can help you match with potential advisors.)
Working With an Hourly Advisor
Still, there are other advisors who may be willing to help you on an hourly or retainer basis. These advisors are probably less likely to have access to a system for helping you directly manage your account, but they may.
If they don’t, they are still likely to offer specific advice on those accounts. They’ll probably even walk you through step-by-step what you should do and when. If this sounds like an acceptable option to you then I would again suggest you call around and ask advisors if this is something they offer. Most advisors who do will make that option abundantly clear on their website so it may save you some time to scan there first.
Of course, don’t forget that investment management is only one component of retirement planning and readiness. It still may be worth hiring an advisor to help you with a comprehensive retirement plan. This will include planning for your investments, taxes, withdrawal strategies, Social Security, healthcare and other considerations. There are plenty of advisors out there who will do this on a project basis. They’ll likely charge either a fixed or hourly fee. (And if you need help planning for retirement or creating a financial plan, consider working with a financial advisor.)
Bottom Line
Finding affordable and comprehensive financial advice to help manage your workplace retirement plan can be challenging, but there are several ways to do it. You can engage a financial advisor on an hourly or a retainer basis and implement their suggestions yourself. Alternatively, some financial advisors use platforms that provide a secure third-party connection to see your account information and place the necessary orders without risking regulatory problems. Don’t forget that financial advice should encompass all aspects of your situation, not just managing a workplace retirement plan.
Tips for Finding a Financial Advisor
- Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have free introductory calls with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Consider a few advisors before settling on one. It’s important to make sure you find someone you trust to manage your money. As you consider your options, these are the questions you should ask an advisor to ensure you make the right choice.
Brandon Renfro, CFP®, is a SmartAsset financial planning columnist and answers reader questions on personal finance and tax topics. Got a question you’d like answered? Email AskAnAdvisor@smartasset.com and your question may be answered in a future column.
Please note that Brandon is not a participant in the SmartAdvisor Match platform, and he has been compensated for this article.
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