When it comes to planning for retirement, the biggest concern confronting many investors is uncertainty.
From overall market volatility, to worries about the ability of central banks to help a struggling global economy, to concerns about the impact of the U.S. presidential election on potential tax laws, investors are increasingly confused about the direction they should take in their investment decisions.
Yet that is when having a financial adviser may make the most sense.
"The number one concern that shows up in all the concerns I hear about (from clients) ... is the word uncertainty," says certified financial planner Tim Maurer of The Financial Consulate in Hunt Valley, Md. "General uncertainty, with elections, European crises, possible war in Iran, general uncertainty is a big one." (More:8 Ways to Avoid Financial Abuse)
But retirement income uncertainty is also a major worry. Will I have enough money to retire? Understanding Social Security and what retirement will mean in 10 or 20 years is also plaguing many investors.
"Running out of money, even among people with wealth, is a major concern," says certified financial planner Dan Gensler of The Gensler Group in Coronado, Calif. "Should they work longer and spend less, or are they more than set for a comfortable retirement?"
"When you have some of the situations that we've found ourselves in recently with instability internationally, it makes people worried," says Lori Schock, director of the Office of Investor Education and Advocacy at the Securities and Exchange Commission. "Some people engage financial professionals, others don't even read their statements and stick their heads in the sand. That is the worst thing you can do."
Having a financial professional to guide you can be critical in volatile times. "This is a complex area. You have tax strategies and investment strategies. So sometimes the biggest decision a person can make is choosing to work with a financial professional," Schock says. (More:10 Things You Should Know About Your Financial Adviser)
Financial advisers may be able to help you, not only with investment decision, but also with retirement, estate and tax planning.
Certified financial planners can help clients figure out how much money they'll need to fund their retirement by running a detailed analysis, Gensler says. "When you incorporate current assets, future contributions, detailed listing of expenses, taxes, inflation and estimated returns, the program will illustrate what the client's future financial health could look like," he says.
Working through these numbers allows the financial adviser figure out if you'll have an over-abundance of assets or barely make it. "It's a very productive exercise."
T. Rowe Price certified financial planner Stuart Ritter says he hears concerns about the global economy from his clients — but he also hears about their personal financial security. "People are asking us 'Am I on track?'," he says. "Am I where I need to be for where I want to get to?"
He says financial planners can help investors answer questions, such as: What do you need to do? Are you doing enough of it? Are you saving enough? Do you need to work longer? Answering those questions "gives people confidence that they're either are where they want to be or what they need to do to get there. And once they have a plan in place, they feel good about it," Ritter says. (More: Is Your Money Safe With a Financial Adviser?)
Many investors are also looking at uncertainty on the tax landscape. "They thought they had an answer last year, and then we had these extenders. They thought they knew what the exemptions were going to be, and then they got a huge increase in the exemptions in the transfer of wealth," says Joanne E. Johnson, head of the wealth advisory group at JP Morgan U.S. Private Bank .
"Our clients are really focused on preserving and protecting their wealth. They're looking at it from two angles. One is retirement and lifestyle. The second is creating and protecting the legacy for their families. People are concerned about leaving some wealth to their children. They don't think their children will be as well off today as they were years ago when they were starting out."
Often having an adviser can help them figure it out. The key is to make sure you find a reputable professional, says the SEC's Lori Schock. "The majority of financial fraud cases could be avoided if investors just asked and checked."