Is It Time to Seek the Help of a Financial Advisor? Here’s a Guide
Most of us know the value of a financial advisor, but we don’t picture ourselves ever working with one. After all, we’re doing just fine on our own…right?
This may have been true a decade ago, but things have changed. The finance world is much more complicated now and the average person simply can’t keep up with all the new rules, regulations, and best practices on their own.
In this article, we’ll explore when it’s time to seek out the help of a financial advisor. We’ll also provide a guide on how to find a trusted advisor that you can work with to reach your financial goals.
Do You Need a Financial Advisor?
In short, a financial advisor is someone you can trust to give you objective advice about your finances. They can help you understand your options, figure out what’s best for your unique situation, and make sure you’re on track to reach your goals. They can also advise businesses on everything from tax planning to picking a business credit card for your startup.
While any person or business can benefit from the assistance of a financial advisor, there are certain situations where they can be especially helpful:
You’re experiencing a major life change
Whether you’re getting married, having a baby, or buying a home, big life changes can have a major impact on your finances. A financial advisor can help you navigate these changes and make sure that your money is working for you. They can also help you create a financial plan that will ensure you’re able to reach your short- and long-term goals.
You’re self-employed or run a small business
If you’re self-employed or run a small business, you’re responsible for managing your finances. This can be a lot to handle on your own, especially if you’re not used to dealing with taxes, investments, and other financial matters. A financial advisor can take care of all this for you and help you make smart decisions about your money.
You’re nearing retirement
As you get closer to retirement, it’s important to start thinking about how you’ll support yourself financially. A financial advisor can help you create a retirement plan that includes things like investing your money, choosing the right retirement account, and planning for healthcare costs. They can also help you make sure you’re on track to reach your retirement goals.
How a Financial Advisor Helps You
There are several ways a financial advisor can help you. We especially recommend working with a financial advisor if:
1. You lack direction
One of the hardest things alone is trying to figure out where you want to be financially in the future. Do you want to retire early? Save for a child’s education? Buy a second home? Pay off debt? There are so many options and it can be tough to choose just one (or even a few).
A financial advisor can help you figure out what your goals are and create a plan to reach them. They can also help you prioritize your goals so that you’re able to focus on what’s most important to you.
2. You find yourself “too attached” to your money
A persistent issue among many people is that they find it hard to let go of their money. They hold onto stocks for too long, even when it’s clear they’re not doing well. Or, they don’t want to sell a home that’s not worth what they paid for it.
A financial advisor can help clear away the emotion from your finances and make decisions based on what’s best for you—not what’s best for your ego.
3. You don’t have the time (or knowledge) to manage your finances
It can be hard to admit, but not everyone is cut out for managing their finances. If you’re busy with work and family, you may not have the time to stay on top of everything.
Hiring a financial advisor gives you the peace of mind of knowing that someone is taking care of your money for you. They can do things you may not have the time or knowledge to do, such as to monitor your investments, keep an eye on tax laws and changes that could impact you, and provide financial planning services.
How to Find a Financial Advisor
Finding the right financial advisor means more than just looking for someone with the right credentials. You also want to make sure that they’re a good fit for your personality and goals.
1. Start with a referral
If you know someone who has used a financial advisor and had a good experience, that’s a great place to start. This is also a good way to weed out any advisors who may not be a good fit for you.
Crypto investors, for example, will want to find an advisor who is well-versed in digital assets and blockchain technology. Having a referral from a friend or family member will help you find someone who meets your specific needs.
2. Check their credentials
It’s important to make sure that your financial advisor is licensed and credentialed as a Certified Financial Planner (CFP). This designation means that they have passed a rigorous exam and are held to high ethical standards.
3. Ask about their fee structure
You should always know how your financial advisor is being paid. Some charge an hourly rate, while others take a commission on the products they sell you. Asking upfront about their fee structure will help you avoid any unwanted surprises later on.
A good financial advisor can handle all of the paperwork, monitoring, and financial planning for you. This gives you more time to focus on your work and family. But finding a good financial advisor can be tricky. Be sure to get referrals, check credentials, and ask about fees before you commit to working with anyone!