Most people agree that they benefit from professional financial advice. If you find yourself asking if you need it, the quick answer is yes. You need it regardless of your age, gender, economic, and personal situation.
The reason behind it is not as straightforward, as there are many different ways of how you may want or need to change financially. Fortunately, how to find a financial advisor for every need is possible. Take your pick from the following examples and decide what kind of financial advisor suits you best.
To help you handle extra money
Whether you get a raise or promotion, receive an inheritance, or sell a property, financial advisors can help you make a wise decision on what to do with the extra money.
Should you put it in an investment? A robo-advisor could help you sort out your options. Robo-advisors are software products that provide financial planning services using algorithms based on your answers to an online questionnaire. They are generally affordable and require low opening balances and can be used in combination with a traditional in-person advisor. Some popular platforms are Betterment and Wealthfront.
To help you deal with money problems
Money problems are often brought on by poor financial decisions or even neglect. It is a clear sign that you need to consult a financial advisor. A financial advisor can help you generate a payment plan which can settle your debt faster by looking at your expenses, debt, and income and setting up a budget.
Fees usually ranges from a few hundred dollars to thousands, so how to find a financial advisor who will fit your restricted budget would be a challenge. But investing in at least one consultation is not unreasonable, especially if this helps resolve your problem.
To help you prepare for retirement
Retirement is a significant life change that has many implications for your financial situation, but an average of 50% of households still fail to prepare for it. Avoid being on the wrong side of these statistics by hiring a financial advisor. Financial advisors specializing in retirement planning can help you lay a solid groundwork for a secure, comfortable, and worry-free retirement.
A financial advisor could help you choose from the many retirement accounts available that would best fit your unique situation, whether it is a 401(k), 403(b), 457(b), or IRA. They could also walk you through the details of retirement income tax, how to optimize Social Security benefits, where best to make retirement investments and other specifics of retirement.
To help you with changes in your family situation
Every change in your family situation also brings financial changes. Starting a new family, getting a new house, sending your child to college, these are all significant moments in your family life that introduce new financial responsibilities.
A financial advisor could help your family make a smooth transition in these situations. For example, they could tell you how to build a college fund by setting up a mutual fund in your child’s name, an education savings account, or a prepaid tuition plan. It is also a better idea to consult one before buying a home since mortgage brokers or real estate agents usually just tell you the maximum amount you can afford without considering other equally important financial considerations in your life years from now.
To help you achieve a financial goal
It is perfectly normal to want more, even if what you have right now seems enough. You may want to reach a particular level of financial independence and have all the motivation in the world but not the economic acumen to get there.
Financial advisors could help assess where you are right now versus where you want to go financially and put you in the best position to achieve your goals. They can advise you on how to make sound investments by balancing your risk tolerance and risk capacity, among others. They can also help you find ways to improve your tax situation, choose long term care, term life, or disability insurance, or simply to save money.
Now that you have answered the why, the next question to ask is who. Deciding which financial advisor is right for you can be difficult. There are many out there, all claiming to be the best for you. To narrow down your options, add the term “fiduciary” to your search parameters. A fiduciary financial advisor is legally bound to put his client’s interest before his own.