Photo by Liza Summer
Are you at the point in your life where you’re wondering whether or not you need a financial advisor? If this thought is even crossing your mind chances are high that you probably do need an advisor.
According to Ramit Sethi of I Will Teach You To Be Rich, there are some key reasons you might want a financial advisor. These include using an advisor if you have a large portfolio or a complex financial situation, or when you’d like a second opinion (second set of eyes) on a situation that is time-sensitive (think paying for your child’s college tuition, buying a house, social security withdraws, etc.).
If you’re still sitting on that fence and are getting frustrated about which direction you should go, here are some indicators that it may be time to seek the advice of a professional. Once you’ve examined your particular situation and needs, you’ll feel better about next steps.
Below are some of the many situations when consulting a financial advisor is a good idea:
You Lack Knowledge
If you have recently come into a large sum of money and you’re feeling a little bit confused about how you are going to manage your finances, this is a clear sign that you need some professional help.
Whether you need advice about investments in real estate, so you can consider special offerings available or you simply need to know where you should be placing your money, a financial advisor is just what you need.
Budgeting and Saving Is Challenging
If you’re finding that budgeting and saving has become extremely challenging it could be that you need someone to guide you on the right path. It can be a rocky road when it comes to putting aside money, especially if you have a tendency to overspend.
If you find that money is decreasing and not increasing then you should take all the necessary steps to make things work.
Things are Complicated
There comes a time in just about everybody’s life when things can become complicated financially for one reason or another. Maybe you want to start school or get married. It could also be that you’re getting a divorce and are seeking custody of your children.
All of this requires some kind of financial leveraging and if you don’t know what you’re doing you could find yourself falling into a pit of financial despair. Having a financial advisor at your side will help prevent you from falling.
Retirement Planning
When it is time for retirement planning you have to make sure that you get everything lined up and ready to go. If you want to achieve your goals a financial advisor can best tell you how to manage your finances so that you will have enough for when you can’t work to sustain your needs.
Your advisor will suggest some suitable retirement accounts and then help you personalize your strategies to ensure that you build your funds up over time. Your advisor can also suggest suitable retirement accounts including options for defined contribution pension transfer and then help you personalize your strategies to ensure that you build your funds up over time.
You Have Inherited
If you have inherited a large sum of money then congratulations to you! However, a lot of responsibility comes along with this and you may need a financial advisor to help you to manage your windfall.
You want to make sure it grows and not diminishes. Think of something like this as a tree that needs to be planted in well-tended soil. Your financial adviser can show you exactly how to do so, and keep your wealth.
Bottom Line
Not everyone or every situation will require a financial advisor. Maybe your current situation isn’t a good fit for seeking out an advisor. That’s okay. Tori Dunlap of Her First 100K says that 99% of her audience isn’t in the tax bracket that finds a financial advisor to be a necessity. Most common scenarios like investing advice (How do I start? Where should I invest?), or how to pay off debt, don’t require the help of a financial advisor. If you do the work, you can find the answers you need through vetted financial experts and reputable online sources. If you do find that you need the help of a licensed professional, choose carefully and get the right professional for the job.
