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At what point might someone need a financial adviser? It depends largely on what we sense our particular weakness to be. Depending on the amount of money under management, a typical adviser will be charging, on an annual basis, somewhere between one-half to one full percentage point of assets under management, so with 100 percent certainty, we know that this amount of money will be subtracted from managed earnings -- in good years and in bad.

For a retiree, the difference between extracting 5 percent of a nest egg for living expenses versus a net of 4 percent after the adviser's 1 percent fee means giving up 20 percent of the annual income. For someone investing money for a 30-year period, earning a net 9 percent rather than what might have been a full 10 percent can mean a third less money by retirement.

What I see as the value-added factor brought to the table by a good adviser is the gift of helping clients weather the storms without throwing in the towel as their stock values plummet. Reminding their clients of the stock market's resilience and the wisdom of staying the course is a difficult task. It's especially difficult when an adviser's clients have little knowledge of investment fundamentals or any sense of financial market history. If this group describes you, then a financial adviser could be worth the cost of his or her hand-holding services. If you understand the fundamentals, but still find yourself freaking out during a market plunge, you need an adviser who is also a therapist.

There are two kinds of advisers -- those who make reasonable promises and meet expectations, and those who promise too much and fall short of expectations. The latter are successful at selling their services, but have a client tenure of about three years -- just a little short of one market cycle.

The former version is typified by people like André Meyer, a former partner at Lazard Freres -- a private investment banking firm in New York. He used to manage money for people like Jackie Kennedy, and, while he made a fortune for himself in high-risk investments, he invested his clients' money very conservatively. While they occasionally complained that he wasn't aggressive enough, he pointed out that when you lose money for people, you lose them as clients and you lose them as friends. Making money slowly and still retaining clients and friends is an art.

An older acquaintance inherited some money back in the 1950s and hired an investment manager who charged one-half of 1 percent per year. For the most part, he told her not to sell any of her blue chip stocks. If she asked him why, he would say, "Because I told you so," and along would come another quarterly installment bill for one portion of his modest annual fee. In effect, she was paying for an index fund before the concept was invented. $250,000 turned into $4 million over the years with dividends providing income along the way. Nothing to speak of was ever paid in capital gains taxes. However, it's a rare adviser who shows that much restraint.

Advisers to steer clear of are those who claim to be able to time the market and who suggest moving into cash when their crystal ball suggests a coming market crash. If they, or their organization, had a successful track record of timing the market, they wouldn't need to be working for you.

Market timing, however, is not to be confused with rebalancing assets, which is a more subtle, incremental change in investment values that takes some chips off the table of winners and adds them to losers systematically. This technique actually has proved to generate higher annual returns by fractions of a percent while reducing risk. For many advisers, however, this approach is too boring and doesn't suggest the stroke of genius often required to attract new clients. Steer clear, as well, of advisers whose fees are enhanced by commissioned products. As a general rule, it's safe to "just say no" to any recommendation that includes commissioned products -- especially any investment products that are difficult to understand.

To generalize, a simple rule of thumb for selecting an adviser would be to find one who has worked successfully for an older person -- someone who has been a satisfied client for 10 years or more. But first ask yourself why you feel ill-equipped to do the job yourself with all the educational resources at your command.

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