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updated 9/8/2011 7:45:08 AM ET 2011-09-08T11:45:08

With all the recent ups and downs in the market, do you sometimes wonder if you really should be managing your life savings on your own? After all, not everyone has all three t’s of time, training and temperament to be a successful investor. Or maybe you have a broker who’s making you feel, well … broker.

We recently received a question from a woman who was looking for investment advice. While we help people with asset allocation guidelines and what to look for in choosing an investment, we don’t manage portfolios or provide the type of specific recommendations that she was looking for. So where can you turn if you don’t want to manage your investments yourself?

Asset allocation funds
The quickest and simplest option for anyone who doesn’t want to pick individual investments is to invest in an asset allocation fund. The key to using these funds is that they are designed to hold your entire portfolio as a “one-stop shop.” That might sound like putting all of your eggs in one basket but these funds are made up of multiple asset classes so they’re a lot more diversified than having 5 funds that all invest in similar things. (Just be careful of any additional fees that the fund may charge.) Let’s take a look at the two most common types.

Target date retirement funds
These are geared towards retirement savings and become more conservative as you get closer to the target retirement date. This means you can “set it and forget it” by picking the fund with the year closest to your retirement date. The only downside is that the fund’s allocation may be more aggressive or conservative than your tolerance for risk.

To fix this problem, you can begin by taking this questionnaire for asset allocation guidelines based on your risk tolerance and time horizon. For your time horizon, think about how long the money will be invested, not how long you have until retirement. That means your time horizon is likely to be more than 10 years since you need your portfolio to last as long as you do unless you’re planning to use the money for something like paying off the mortgage or buying an annuity before then.

Next, compare those guidelines with how the fund invests, which you can find in the fund’s prospectus. If you’re more conservative, you can pick a fund with an earlier date. If you’re more aggressive, you can pick one with a later date.

Balanced funds
In contrast, a lifestyle or balanced fund is based on your risk tolerance. There are usually ones for conservative, moderate and aggressive investors. The trick to these is that you may want to move from a more aggressive to a more conservative fund as you get closer to your retirement date.

Employer-sponsored advice
Asset allocation funds are great when you’re just starting out and perhaps have just one retirement account but as your financial situation becomes more complex, you may want a portfolio more tailored to your individual needs. If that’s the case, start by checking with your HR department. Your employer may offer you free access to a site like Financial Engines, an excellent software program that provides customized investment advice and ongoing monitoring of your portfolio. In addition, some retirement plan providers also offer free advice on their funds but they may also want to sell you an investment management service that you might not need or would be better off getting from an independent adviser.

Discount brokerages
If you can’t get these services at your workplace or if you prefer to talk with someone about all of your assets (not just those in your employer’s retirement plan), consider going to a discount brokerage like Fidelity, Charles Schwab, TD Ameritrade, or Scottrade. They have local branches all over the country and their consultants can often give you some basic guidelines and recommendations from a large selection of funds at no cost. However, if you want more sophisticated financial planning advice, you have to pay for it. In that case, you may have better options.

No-load mutual funds
Some no-load mutual funds provide advice if you invest in their funds. For example, Vanguard offers fairly in-depth free financial planning and investment advice for households with more than $500k in their funds. If you have less than that but at least $50k with them, the charge is only $250. The biggest downsides of using a mutual fund company are that the advice is usually only over the phone, it’s generally limited to their funds, and you likely have to pay extra for ongoing management.

Personal financial advisers
If you want in-person comprehensive financial planning, this is probably your best bet. But be aware that if an adviser sells investments or insurance policies for a commission, they may be biased towards certain products. This includes “fee-based” advisers who both charge a fee and collect commissions.

“Fee-only” advisers who are compensated with an asset management fee (usually about 1 percent) don’t have the same bias for particular products. However, they do earn more if you invest money with them rather than using it to pay off debt or to invest in something like real estate or your own business. The better advisers also tend to have minimum asset requirements of at least $250k but usually $500k-$1 million so you might not even qualify to work with them. Finally, a 1 percent fee can be very expensive. If you’re a retiree living off a 4 percent withdrawal from your portfolio, a 1 percent fee can cost you 25 percent of your investment income.

For the most unbiased advice, you can find advisers that charge hourly fees through the Garrett Planning Network and ones that charge annual retainers through the Alliance of Cambridge Advisors. Both are national networks of independent advisers who generally don’t have asset minimums and don’t sell anything but advice, usually for fees that are much lower than you would pay with a 1 percent asset management fee. With Garrett’s hourly model, you can pay for advice only as you need it. With a Cambridge adviser, you generally pay more but you get ongoing advice plus tax preparation.

As you can see, you don’t have to face the market all by yourself. There are lots of options for good financial advice at a reasonable cost. Just be sure to do a little homework and figure out which makes the most sense for you.

Liz Davidson is the founder and CEO of Financial Finesse, a leading provider of unbiased financial education for employers nationwide, delivered by on-staff CERTIFIED FINANCIAL PLANNER™ professionals.

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