Who doesn’t benefit from expert financial advice? After all, making decisions about money is not always easy. Yet, you’d much rather plan your finances yourself than hire a professional. Why? Financial planners are expensive. However, you can’t always DIY when it comes to handling money. Things can get complicated at times. And that’s when paying for financial advice becomes completely worthwhile. But how do you know when you need a financial advisor? What are the possible situations under which hiring a professional is the best option? And when you’re ready, how do you find the right one? Here are some ways to find out.
When Do You Need a Financial Advisor?
If you have significant assets and feel anxious about making the right decisions, hiring a professional makes perfect sense. However, if that’s not the case it’s better to evaluate yourself, and also do a cost-benefit analysis to determine whether you really need one.
Questions to ask yourself
- Do you have a good knowledge of investments?
- Do you read about financial management and follow topics surrounding finance and investment?
- Do you have the time and expertise required to monitor and manage your financial portfolio?
If you answered ‘yes’ to all these questions, then you probably don’t require a professional financial planner. If not, you’re sure to benefit from hiring one.
Other situations when you may need a financial advisor
- You have access to a large sum of money: If you’re approaching retirement and have access to a lot of money, a financial advisor can help you decide what to do with it. They can manage your portfolio from an impartial and unemotional perspective.
- You’re in doubt: Sometimes you face uncertainty when it comes to financial decisions and doubt plagues your investment choices. When you’re not sure if you’re investing in the right assets at the right time, it’s best to seek professional advice.
- You’re lost: While planning for your future, you may feel lost and need guidance to determine the best way to plan your finances. A financial advisor provides much-needed assistance during these times.
Steps to Find the Right Financial Advisor
- Once you’re ready to look for a financial advisor, start asking for referrals. Friends, family, and coworkers who have been managing finances well can give you great recommendations.
- Seek professional recommendations. The Financial Planning Association (FPA) and the National Association of Personal Financial Advisors (NAPFA) can provide suitable referrals.
Deciding whether or not you should seek professional advice is important. A financial advisor is certainly expensive. But the decision to hire one can save you from irrational investments, identify opportunities you may have overlooked, and ultimately make you more money in the end. So make the right choice and get set for a rewarding financial future.