How to Know If You Need a Financial Advisor

financial advisorMost people have questions about their finances they can’t answer alone every now and then. If this has ever happened to you, you might have turned to the internet to see if others have had the same question, or you may have relied on advice from friends and family. I've done both of those things myself from time to time. But  there are times when even those sources won't cut it and you need a financial advisor to point you in the right direction. If you think this you might be in this situation, here are some signs that you might need a financial advisor.

1 You Have Unanswered Investment Questions

Do you have a 401K plan but you are unsure how your money is invested? Do you know what fees are you paying? If this is the case, it might be time to talk to a financial advisor.

The fees associated with any 401K may not be easily recognized if you don’t understand what you are looking at on your statements. In addition, the rate of return of each fund is different, and has an impact on the investment dollars within that fund. Talk to the plan administrator to get further clarification on the funds in your investment portfolio and the fees on your statement.

2 You Want Someone Else to Handle It

Some people simply don’t want to deal with their finances. If you are one of them, it might be a good idea to hire a professional. However, I would advise you to ask in advance about their fees. You don’t want to get stuck with a huge bill you weren’t expecting after services have already been performed. You should also shop around to make sure the financial advisor you hire is on the same page as you when it comes to how you want your money managed. There's a lot to be said about hiring someone you trust and who understands your wants and needs.

3 You’re Not Sure You’re Saving Enough

At one time or another, just about everybody questions whether or not they will have enough saved to live comfortably when they retire. A financial advisor can help you come up with a plan to get the most out of your investments for a more secure future when you reach retirement. Another way they can help is by keeping emotions out of financial decisions and using only the facts. When we deal with our money on our own it can be hard to do that.

4 You’ve had a Major Life Change

When you get married, have children, or make a huge career change, it may be time to seek the advice of a professional when it comes to your finances. Each of these changes can have major impacts on your financial well-being, and each can require you to take a different approach to your finances. Hiring a financial advisor can help you answer questions you may not have even thought to ask.

5 You Own a Business

As a business owner, you have responsibilities the average person does not have, such as sending W-2 statements and payroll taxes, 1099's if your business utilizes contractors. If you are not well versed in such things, the cost of hiring a professional can be much less than penalties you could incur from the government for failing to follow appropriate procedures for such matters.

6 Wills & Trusts

Having assets of any significance but no documents to protect the interests of your beneficiaries is not a good financial strategy. Your financial advisor can usually help you locate a lawyer to assist with the creation of these documents. But don’t put it off as many people tend to do. Your beneficiaries will thank you if something unexpected happens today or tomorrow and you've already got your documents in place.

As you can see, there are many different reasons you might decide to hire a financial advisor. It seems the best advice is, if you question the need for one, you probably do need one, at least temporarily.

Can you think of any other reasons or situations where you might need a financial advisor?


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One thought on “How to Know If You Need a Financial Advisor

  1. Thanks for sharing this list. I was glad to see you mention checking for fees before committing to using any service or advising. I couldn't imagine seeking someone out for financial advising only to find out I'm now out of money because of it. Considering how much of life in general changes with marriage or the birth of a child, I think the tip to seek some sort of financial advising after a major life change is incredibly important.

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