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How Do I Know When It’s Time to Hire a Financial Advisor?

When it comes to your financial future, there is no doubt that the decisions you make today can drastically impact the course of your life. From choosing the right investment strategy to minimizing tax liability, choosing appropriate insurance policies and limits, and retirement planning, all of the actions you take (or don’t take) in the present could have long-lasting repercussions.


But, when is the right time to stop doing things on your own and enlist the help of a professional financial advisor?


The decision on when to hire a financial planner is a very personal one and it isn’t necessarily tethered to a certain age or net worth. However, there are particular events and life situations when having a trusted professional by your side to guide you can alter the trajectory of your life.


Some refer to these times as inflection points—times in life when you have major financial decisions to make but aren’t sure how to handle them. When you find yourself in need of an expert to help you make sense of your situation, it’s probably time to begin your search.

The following is a list of situations in which the help of an expert could significantly improve your financial and personal outcomes.

1. When Your Financial Situation Becomes More Complicated


When life changes, money changes, too. Marriage, divorce, the loss of a spouse, the birth of a child, receiving a large inheritance or windfall, or even unprecedented career successes are all life events that can significantly complicate your money matters. Whether it’s combining or dividing assets, protecting your assets and your loved ones, or preparing to leave the workforce, there is much more going on beneath the surface of these decisions than meets the eye.


Maybe you’ve made profitable investment decisions, but don’t know how to optimally handle the accompanying tax liabilities, or perhaps you’re in a position where your income has dropped and you aren’t sure if you are on track to meet your retirement goals. Whatever your situation, there are always ways to improve the outcome. But without a clear idea of how to handle life’s changes, you could end up making costly mistakes.

2. When You Lack the Time, Temperament, or Training to Manage Your Own Money


As an investor today, you are in a unique position that our parents and grandparents were not. You have an abundance of information available at your fingertips 24/7 via the World Wide Web. This is great when you need simple answers to simple questions. But everyone’s situation is unique and for any major financial decision that needs to be made, there are numerous components to consider before taking action. The more complicated the situation, the more difficult it will be to piece enough information together to make an informed decision on your own.


Or, perhaps you don’t have the time or temperament to read, research, and implement your own money decisions and you recognize you’re better served delegating the task to an expert. It makes perfect sense. After all, when you have a medical issue, you go to a medical professional. For car trouble or routine maintenance, you visit a mechanic. It only makes sense to put your finances in the hands of trained experts when you lack the knowledge or desire to do it yourself..

3. When You Desire an Objective Opinion


Money isn’t necessarily complicated, but it can complicate things—especially when there are other people (spouses, children, family, business partners) involved. We even have our own personal biases that we can’t help but bring to the table when we approach our finances. These external pressures and personal partialities can cloud our ability to make the best decisions for ourselves.


A financial advisor who is held to the fiduciary standard, and not the suitability standard, however, is not only ethically bound but legally bound in their fiduciary duty to offer advice that is in your best interest. It doesn’t matter what your spouse thinks or what the headlines are urging investors to do, your financial advisor is the one in your corner who will objectively show you the paths most beneficial for you.

4. When You Are the Main Financial Decision-Maker and Want to Protect Your Family


Being the family’s financial masthead can be overwhelming. What if you don’t make the right decisions and your loved ones are negatively affected? That’s an undue amount of pressure to manage on top of the daily challenges of life. Enlisting the help of an advisor relieves you of some of that baggage, granting you confidence that your spouse and family are not only taken care of now but will be there to support your family should something unexpected happen to you in the future.

5. When You Simply Don’t Know What to Do


Maybe you’ve made too many mistakes going it alone. Or maybe you’ve done great and turned $50K into $500K in record time. But what’s the next step? One article recommends “x”, while your peers swear by “y” and yet none of these options feel completely right. Heads you win, tails you lose. It’s all a bit too risky and you have no more wiggle room to leave things up to chance.


Fortunately, your financial future doesn’t have to be a gamble. Financial advisors have spent years studying and putting financial planning rules of thumb, Nobel prize-winning research, and historical trends into practice. They’ve seen what typically works and what doesn’t and will likely have recommendations that you aren’t even aware of. They use this knowledge and experience to help you navigate even the toughest of situations for a promising road ahead.

Is a Financial Advisor Right for Me?


Hiring a financial advisor isn’t right for everyone. Some individuals aren’t inclined to the collaboration or delegation it requires to have a successful advisor-client relationship. But, if you find yourself in one of the above situations and are open to expert guidance, hiring an advisor may be the worthiest investment you ever make.


Chances are if you know you need to make some major financial decisions, but you don’t know what to do, you need a financial planner. When you need help with your health, you go to the doctor. When you need help with your financial health, why not see a professional as well? While each situation is unique, getting financial advice earlier in the decision-making process is almost always better.


Hiring a financial planner can help you navigate the more challenging (and sometimes simpler) financial situations. If and when you do decide to enlist the help of a professional, make sure you take the time to select the right financial planner. Look for experience, the right certifications and a knowledge-base equipped to handle your situation.

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