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  • Kyle Rolek

8 Reasons to Hire a Local Fiduciary Financial Advisor

Updated: Jul 19

A local fiduciary financial advisor understands nuances of the local area and can add value in ways that cookie-cutter planning can’t match. This article discusses 8 reasons to hire a local fiduciary financial advisor.



Reason #1 to hire a local fiduciary financial advisor: They can get other local specialists involved in the planning process as needed.


An experienced, local fiduciary financial advisor can bring in other local specialists to help with your overall retirement planning as needed. Regarding tax planning, while a local fiduciary financial advisor may be familiar with state and local taxes, a Certified Public Accountant can provide additional expertise and also help with actually filing taxes.


Regarding estate planning, laws vary from state to state and the probate process varies from county to county. Having access to an experienced, local estate planning attorney is a valuable resource, and a local fiduciary financial advisor can provide that access.


Regarding healthcare planning, the insurers that provide Medicare Supplement Plans and the plan costs vary from state to state and county to county. A local fiduciary financial advisor can loop a Medicare planning specialist into their retirement planning process as needed.


The Medicare planning specialist can then make sure the appropriate Medicare Supplement and Part D plans are chosen at the best price available based on your local zip code.



Reason #2 to hire a local fiduciary financial advisor: They are familiar with state and local taxes.


Some states tax retirement income, while others do not. Pennsylvania, for example, does not tax many significant sources of retirement income at the state level such social security income, pension income, and IRA distributions.


However, other retirement income sources such as dividend income, interest income, and income from part-time work is taxable at the state level in Pennsylvania. In addition to retirement income taxes, property taxes vary from county to county.


If you were planning to downsize anyway, downsizing in the next town over with lower property taxes has the potential to result in significant tax savings over a 20-year or 30-year period. A local fiduciary financial advisor will be familiar with taxes at the state and local levels. This can result in tax savings and better overall retirement planning.



Reason #3 to hire a local fiduciary financial advisor: They identify common retirement planning mistakes specific to your local area.


As an example, some Pennsylvania residents also have a Jersey Shore home or a Florida home. Many of these families aren’t aware that owning property in two states can subject their estate to the probate process in two states. This can be a hassle to deal with, and it can also increase the fees and taxes assessed against the probated estate depending on the states involved.


Relatively simple estate planning can eliminate this risk. Fixing the problem isn’t hard once it’s identified. A local fiduciary financial advisor knows where to look to identify problems and opportunities for improvement that are commonly found when working with local families.



Reason #4 to hire a local fiduciary financial advisor: They often have familiarity with state employee benefit plans.


In a case where the local fiduciary financial advisor has state employee clients, they’ll have familiarity with the state employee benefits package. This benefits state employees.


For example, the PA teacher pension system is called PSERS. The retirement benefit available through PSERS involves a choice between a higher monthly income amount, or a lump sum with a lower monthly income amount.


Regarding the lump sum benefit, 403b vendors in the school districts may inaccurately inform teachers that they are required to rollover their pension lump sum into one of their 403b accounts, which are often high-fee variable annuity contracts. This is not true.


Pennsylvania teachers have control. They can rollover their pension lump sum to a Traditional IRA at a custodian of their choice, it does not have to be one of the high-fee 403b variable annuity providers.


A local fiduciary financial advisor gets to understand these nuances from working in the local market over time, and teachers benefit from their experience. In this example, the local expertise can ultimately lead to a much better long-term financial outcome for the teachers who get to work with a local fiduciary financial advisor.


Further, the PSERS hop program provides benefits related to healthcare during retirement. A local fiduciary advisor has the ability to provide guidance about this as well because they’ve acquired know-how specifically designed to serve the needs of people within their local area over time.  



Reason #5 to hire a local fiduciary financial advisor: They often have familiarity with the employee benefit plans of local employers.


Similar to reason #4 above, a local fiduciary financial advisor may already have other clients at your employer, especially if it’s a large employer in the local area. As a result, they may already know how your 401k plan works.


For example, the local fiduciary financial advisor may already know about the company match, the available investment choices, whether there's a Roth option or not, and whether or not you are eligible for an “in-service rollover”, which permits you to rollover your 401k to a Traditional IRA at age 59.5 while you’re still working at the company.


This specialized, local knowledge about the benefit plans of employers in the area can uncover opportunities that a more cookie-cutter approach would overlook.



Reason #6 to hire a local fiduciary financial advisor: They have familiarity with local Medicare Supplement Plans.


The insurers that offer Medicare Supplement Plans vary from state to state and, even more locally, from county to county. Further, pricing varies by zip code, among other factors.


A local fiduciary financial advisor can customize the healthcare cost assumptions used when creating your retirement plan because they are familiar with what healthcare services and insurance actually costs in your local area.



Reason #7 to hire a local fiduciary financial advisor: They have some familiarity with state-specific estate and inheritance rules, procedures, and taxes.


From experience seeing clients work though the probate and estate administration process, a local fiduciary financial advisor gains some understanding of how simple or challenging the probate process is in their state, or even more localized on a county-by-county basis.


Further, a local fiduciary financial advisor will be able to involve a local, experienced estate planning attorney when appropriate to design an estate plan with state-specific inheritance taxes (Pennsylvania has an inheritance tax), state-specific asset protection laws, and other state-specific considerations in mind.


Estate planning is an area where having local expertise is absolutely critical.



Reason #8 to hire a local fiduciary financial advisor: They can identify mistakes when estimating retirement expenses.


While expenses will vary from family to family, a local fiduciary financial advisor will be able to identify instances when a client’s estimate of their expenses are too low.


For example, if the average 65-year-old couple in a local area spends about $6k per month and a family says they only spend about $2k per month, the local advisor will notice the large deviation from the average.


It’s possible this family really does spend far less than the average family in the local area for a variety of reasons. Regardless, the local fiduciary financial advisor will dig in and see if any expenses are being overlooked.


Undercounting expenses can result in building a retirement plan that provides less income than you really need. This can be a mistake that risks your long-term financial security.


However, a local fiduciary financial advisor will be likely to catch this potential problem up-front, before it becomes a real problem, specifically because of their local area expertise.


Would you like a 1-on-1 retirement planning consultation? Fill out the “Request Consultation” form, call us at 267-427-5667, or email kyle.rolek@rolekretirement.com

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