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Excerpt: Is a financial adviser right for you?

  • Story Highlights
  • Many question whether they need professional advice about their financial future
  • Financial planners can help access opportunities you might not know about
  • There are different types of advisers; Only you can decide which makes sense
  • Next Article in Living »

Editor's note: All this week CNN.com is running excerpts from CNN chief business correspondent Ali Velshi's new book,"Gimme My Money Back: Your Guide to Beating the Financial Crisis,"published by Sterling & Ross. This is the second excerpt in the five-part series.

Ali Velshi

Ali Velshi is CNN's chief business correspondent and host of "Your $$$$$," CNN's weekend business roundtable.

A word here about financial advisers. The question is, "Are they worth it?" The answer, not surprisingly, is, "It depends."

That's not a cop-out. It has more to do with you than the adviser. What's interesting is that there are many areas of life where we wouldn't dream of not using a trained professional. Anyone here want to take out your own appendix? Raise your hands. I thought not.

Many of us are quite willing to hire carpenters to modernize our kitchens, golf pros to help improve our games, tutors to give our kids a better shot at Harvard and, of course, barbers and hairdressers to help us look our best.

But when it comes to the most important decisions about arguably the most important area of our lives -- our futures -- the attitude is often, "Why the hell should I pay some joker to do something I can do myself?" iReport.com: Have an investment question? Ask Ali

Now, granted, there are true do-it-yourselfers in this world. They've got the Time Life series of home improvement books and they can fix the bathroom sink, stop the squeak in the front door, seal the drafty window and all the rest. They not only knit their own sweaters, they shear the sheep and card the wool. They've put the household finances on Quicken and they enjoy sitting at the computer, paying the bills electronically and roaming through the fields of their orderly, buttoned-up realm. Video Watch more "Gimme My Money Back" »

Ask Ali Velshi
All this week on "American Morning," CNN chief business correspondent Ali Velshi answers your financial questions.
Weekdays starting at 6 a.m.

But then there are the rest of us. We tend to go with the flow. We don't read all the instructions before we try to assemble the toy. If no one's stolen our identity, it's probably because no one's interested, not because we've been especially careful about it. When we look at what's involved in perfection, we usually decide that close enough is good enough.

Certainly the latter group, and probably the former as well, could benefit from the services of a professional who knows the terrain and whose job it is to help you stay out of the swamp and walk a safe and comfortable path to long-term financial security.

Financial planners can help you access opportunities you might not otherwise know about. They can discuss your investments with the insight and nuance gained from working with individuals at all different levels of experience and understanding. They can help you optimize your portfolio, keep you on track, coach you through the tough times and commend your ultimate success.

Many different kinds of professionals make up the universe of advisers. There are straight commission brokers, who earn a fee on every trade you make. The more you trade, the better they do. There are fee-based professionals who will manage your portfolio for a small percentage of the assets in it. There are those who charge by the hour, like an attorney, and who will listen to your questions, assess your situation and provide advice. There are discretionary managers to whom you give the power to trade on your behalf, and there are arrangements in which you must give approval to every move up front.

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Only you can decide which, if any, of these avenues might make sense for you. If you're more comfortable doing your own research (and there's plenty of information publicly available) and executing your own trades, by all means do so. If you're the kind of person who would appreciate a professional point of view, well, that's certainly available too.

In tomorrow's excerpt we'll reveal some of the key principles to financial success through investments.

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