At what point does one need professional financial advice? Is it when your assets have grown to a certain point, or is it only when you have special concerns like estate planning or passing on a business?
To answer this question, it’s important to understand the difference between a financial planner and an investment adviser. An investment adviser helps you decide what to invest in, whereas a financial planner takes a holistic approach, advising you on your entire financial picture. (Some financial planners are also investment advisers, but this is not necessarily the case.) You may not need professional investment advice until your assets reach a certain level, but long before that time arrives, you are likely to have questions about paying down debt, saving for retirement, or how much house you can really afford to buy. A financial planner will be able to develop a comprehensive financial plan for you that will address all these questions, and move you toward your goals.
If you are asking yourself whether you really need professional financial planning advice, chances are, what you’re really saying is, “I have questions about my financial picture, but I don’t know if I can afford to get answers from an expert.” That’s because when it comes to dealing with our money, we all have questions, regardless of our age or net worth. We would all feel better if we had ready access to financial advice that we could trust (and afford). In many ways, this is similar to having a good personal physician who knows your medical history and can advise you knowledgeably whenever a medical issue comes up. Will there be issues that you can research and resolve on your own? Of course. But access to an expert to help and guide you when you need it will give you confidence and peace of mind. The challenge is finding the right adviser for you.
- If you decide you do want financial advice from a professional, I’ve written about how to choose a great one here.
- After you’ve established a relationship with a financial adviser, you can use these guidelines to judge your adviser’s performance.
- If cost is an issue for you (as it is for most of us), here’s why I think a hybrid robo adviser service might be worth a try.
Do you have a financial adviser? How did you come to the decision that you needed one?