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Asset Preservation Advisors




City:Atlanta

State: GA



BIOGRAPHY:
APA’s philosophy is to work closely with our clients to develop an in-depth understanding of their unique needs and objectives. We then customize a municipal bond portfolio that best meets their specific goals and needs. APA manages high quality municipal bond portfolios in four strategies: Short-Term, Intermediate-Term, High Income, and Taxable.

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Consulting with a Professional Advisor on Retirement Plans Pays Off: Study

Retirement plan participants who consulted with a professional financial advisor earn higher returns on their investments than those who do not, according to a new study.

| BY Donald Liebenson

Advisor-dependent retirement plan participants earned nearly three percentage points more than those who did not work with a professional, according to a new study by Aon Hewitt and Financial Engines. The study analyzed eight large defined contribution plans between 2006 and 2010 and covered 400,000 participants with $25 billion in assets.

The study, as reported by Financial Planning magazine, found that in those five years, participants who received some form of professional assistance experienced higher returns averaging 2.92 percentage points (net of fees) than those who managed their 401(k)s on their own. Aon Hewitt and Financial Engines projects that a 45-year-old participant who consults with a professional on a $10,000 investment will have a portfolio valued at $71,400 at age 65, compared to $42,100 for someone who invests the same amount of money with no professional guidance.

The study also found that nearly a third of participants (30 percent) were consulting with professional advisors, up five percentage points from 2009. This correlates with findings of Millionaire Corner wealth level studies of households with a net worth between $100,000 and $1 million (not including primary residence). In our 2011 study, 20 percent said they would rely more on a financial advisor because of the prolonged economic downturn, an increase of seven percentage points over last year. Of these, baby boomers between the ages of 55 and 64 were twice as likely as those who are younger to want to rely more on a financial advisor.

More than a quarter (26 percent) of respondents to our study also said they would like more advice and assistance in choosing among the investment choices offered in their retirement plans. Of these, almost half (42 percent) were ages 54 and under.

Professional guidance may be comforting to those with a investment risk tolerance, the Aon study found. Thirty-eight percent of plan participants who did not seek the guidance of a financial advisor had excessive risk levels, while participants who did rely on a professional maintained more diversified allocations with appropriate risk levels.



About the Author


Donald Liebenson

dliebenson@millionairecorner.com

Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.  

A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.