Do I need a financial advisor? Deciding when to get one

Managing your money can be a daunting task, and sometimes you might need a little extra help to make sure you’re on the right track. That’s where a financial advisor comes in. But how do you know if hiring one is the right move for you? Let’s dive into the key considerations.

What financial advisors do

Financial advisors are experts who help individuals manage their money and plan for their financial futures. They can assist with a wide range of financial goals, such as retirement planning, budgeting, estate planning, and more. Your personal circumstances, including your family, age, career, and priorities, are all taken into account when crafting your financial goals. A financial advisor is there to guide you and help you reach those milestones.

It’s important to remember that goals can change over time. As you hit major milestones or decide to change course, a financial advisor can help you adjust your strategies and set new goals.

When to consider getting a financial advisor

Not everyone needs a financial advisor, as it is an additional cost. However, there are certain situations where their expertise can be invaluable. Here are three key reasons why you might want to consider hiring a financial advisor:

Life events

Major life events like graduating college, getting married, expanding your family, or starting a business can have a significant impact on your financial situation. During these times, a financial advisor can help you navigate the changes and make sure you stay on track.

Lack of experience

If you find yourself struggling to understand certain financial concepts or have complex financial needs, hiring a professional can provide the guidance and knowledge you need. A financial advisor can help you grasp unfamiliar concepts and ensure you make informed decisions.

Developing a strategy

Whether you’re just starting to invest, saving for emergencies or retirement, or considering real estate investments, a financial advisor can help you craft a tailored strategy to achieve your goals. They will be your guide in creating and executing a plan that aligns with your aspirations.

Choosing the right financial advisor

With numerous types of financial advisors available, it’s essential to find the right fit for your needs. Here are a few major types to consider:

  1. Certified financial planner (CFP): These professionals have earned the CFP designation and possess a broad knowledge base to advise you on various financial topics. They are committed to acting in your best interest and have undergone rigorous training and examination.

  2. Robo-advisor: If you’re new to investing and want a straightforward approach, a robo-advisor could be a suitable option. They use algorithms to manage your investment portfolio based on your risk tolerance and goals. It’s a convenient and hands-off method of investing.

  3. Wealth manager: If you have a high net worth and require personalized advice, a wealth manager can provide tailored solutions for managing investments, estate planning, tax strategies, and more.

Other professionals like financial coaches or consultants can also offer valuable insights and guidance, especially for basic financial questions. Remember to thoroughly vet any professionals before engaging their services.

Questions to ask a financial advisor

When considering hiring a financial advisor, it’s crucial to ask them relevant questions to ensure they are the right fit for you. Here are a few inquiries to consider:

  1. Are you a fiduciary?: A fiduciary is legally obligated to act in your best interest. It’s important to ascertain if your potential advisor operates under this standard.

  2. How are you paid?: Understanding how a financial advisor is compensated is essential. Fee-only advisors are paid directly by clients, ensuring their advice is unbiased, while commission-based advisors may receive compensation from third-party companies.

  3. How will you assist me?: A helpful and supportive advisor is crucial to your financial success. Ask them how they would handle various situations, like market downturns or job losses, to gauge their ability to guide you effectively.

Final thoughts

While not everyone requires a financial advisor, personalized advice can greatly benefit those looking to build a strong financial future. Regardless of your current wealth, a financial advisor can offer valuable insights and strategies tailored to your specific goals. If you’re interested in finding a financial advisor near you, consider using ATICE.INFO’s financial advisor matching tool.

Remember, financial planning is a journey, and having an expert by your side can make all the difference. So, take the time to evaluate your needs and make the best decision for your financial well-being. Happy planning!