Are you one of those investors who scrutinizes quarterly statements line by line, or someone who shoves the quarterly statements in the desk drawer on top of last year’s tax returns?

If the stock market plunged more than 500 points, would you break out in sweat or decide not to sweat it? Or maybe you’re the type of investor who religiously researches stock quotes in The Wall Street Journal and reads the latest from Barron’s like I do. Only you know what type of money manager you would make. So, if you are thinking about whether or not to hire a financial advisor, now’s the time to be brutally honest with yourself.

Is It Worth It? Weighing the Costs of Financial Help

How much you’ll spend on a financial planner will depend on what type of advice you need and whether you want to receive it on an ongoing basis. In general, there are three types of financial planners:

1. Fee-Only Planners are paid only for the advice they give. They do not earn commissions by selling financial products like life insurance or mutual funds.

2. Fee-Based Planners earn fees from advice, and they make commissions on some of the products they sell.

3. Commission-Based Planners make money from the products they sell directly.

There are pros and cons to each, but there are a couple of key advantages to going the fee-only route that I want to point out here. First, you don’t have to worry that your planner is making a recommendation to generate higher fees. Second, you get a better idea of how much you'll be paying for advice.

Some fee-only planners charge a percentage of a client's assets, and individuals who hire them tend to spend the most of all—from 0.5 to 1.5 percent of the assets under management, with the national average hovering around 1 percent.

Now, this may not sound like a lot, but if you’re nearing retirement and your nest egg is worth say, $500,000 to $1 million, you’ll be spending $5,000 to $10,000 a year on fees. Also keep in mind that any mutual funds that your advisor recommends will also carry their own fees and expenses.

Always Ask the Tough Questions

These days anyone can call themselves a “financial advisor.” So be sure to get all the facts before trusting a complete stranger with your money.

I recommend interviewing potential advisors, just like you would a job candidate, and don’t be afraid to ask the tough questions, including:

• What’s your educational background?
• How many years have you been working as a financial advisor?
• What areas do you specialize in?  (i.e., retirement, college planning, estate planning, etc.)
• What’s the average net worth of your clients? (Look for advisors who regularly work with people like you)
• May I speak with three of your clients as references?

And the toughest question of them all: Have they been citied by a professional or regulatory governing body for disciplinary reasons (Hey—you don’t want to hire someone with a sketchy background! I’ve listed some additional resources below where investors can go to check up on a financial advisor.)

Like anything else in life, there are both pros and cons to hiring a financial advisor. But ultimately, the final decision hinges upon you and how much control and involvement you want to have over your own portfolio. Believe it or not, most Americans choose to be their own financial advisor.

Always Be Your Own Financial Advisor

The Employee Benefits Research Institute reported that only 43% of American surveyed said that they have used a financial advisor. That means most Americans manage their own investments (and actually open those quarterly statements when they arrive!).

Managing your investments isn’t about skill or Wall Street know-how. And it’s certainly not about timing the market or buying the latest stock tip. It’s about getting organized and taking the time out of your busy life to learn about investing. See, even if you hire a financial advisor to do most of the work for you, you’ll still need to be involved in managing your finances.

Here are a three simple ways to keep your finger on your finances whether you decide to choose a financial advisor or not:

#1: Get (And Stay) Organized

Before you can get started, you’ll need to know where you stand financially. Get your hands on at least 6 months’ worth of brokerage and bank statements along with the past three years of tax returns to help you get a clear financial picture. It’s not a bad idea to keep these records handy. Stash them in a file for easy reference.

#2: Start Planning Ahead

Now that you have all of your statements in front of you, begin reading in between the lines. Could you be saving more for retirement?  Do you have other attainable financial goals that you want to reach in 5, 10, 15 years? If so, are your investments on track?

#3: Learn to Do Your Own Research

Now’s the time to take a long hard look at each individual investment. How are they performing on a 1-year, 3-year, 5-year or 10-year scale? Are they underperforming or out performing industry leaders in the same category?

Not sure? Don’t worry—it’s easy to find out. To compare the latest stats on stocks, bonds and mutual funds just visit Yahoo! Finance or Morningstar.com and simply type in the investment’s ticker symbol. Both sites allow for side by side comparisons so you can clearly see how your stock or mutual fund truly stacks up in the industry.

If you decide that you want some help along the way, let me introduce you to some of the brightest minds in the industry including: Louis Navellier, one of America’s premier stock pickers and editor of Blue Chip Growth, or Toby Smith founder of ChangeWave Investing and frequent contributing market analyst for the Fox News Channel, or Richard Band, the world’s #1 authority on investing for low-risk growth investing with his Profitable Investing newsletter. No other free online investing resource even comes close.  Click here to meet these advisors, and learn more about their services.

Additional Online Resources:

• To locate a certified professional advisor near you and download a comprehensive checklist, visit The National Association of Professional Advisors
• National Association of Securities Dealers (NASD) keeps track of complaints and charges against financial professionals. You can check the background of your professional advisor by visiting the NASD Broker Check section.