At some point in your life, you are going to ask yourself, “Do I need a financial advisor?”
Sometimes this question is prompted by a sudden change in circumstances, such as a large financial loss or gain.
Other times, you might find yourself thinking more and more about the future and whether you are on track for retirement.
How important is it to get a financial advisor? Is it worth it to pay an advisor, or are you better off going it alone?
Trying to manage your money completely on your own can be tempting. But following are a few reasons why a financial advisor’s services can be indispensable.
1. Discover opportunities you might have missed.
Even if you are currently doing well financially and are on track for retirement, that doesn’t mean that you don’t need an advisor.
Maybe you are doing fine, but what if you could do even better? What if a few simple changes in how you manage your investments could increase your cash flow in retirement, or give you more to pass on to your heirs?
A financial advisor can alert you to opportunities which on your own, you might never even consider.
When you take advantage of those opportunities, your advisor’s services may pay for themselves more quickly than you think.
2. Get help setting realistic, achievable financial goals.
It is an oversimplification to believe that the sole job of a financial advisor is to tell you what to invest your money in.
A financial advisor provides a broader level of support which can encompass more than just how you meet your goals.
For many people, challenges with managing money start with difficulties in setting goals in the first place.
You might have a hard time restraining the urge to reach for goals that are far beyond your means.
On the other hand, you could have just the opposite problem—a tendency to aim lower than you could.
An advisor can help you assess the field of possibilities in a realistic way, setting ambitious yet practical goals you can make measurable, consistent progress towards.
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3. Receive support in creating a concrete plan to meet your goals.
Just as some people struggle with goal-setting, others struggle with coming up with an overall financial plan.
This goes far beyond what stock you choose to invest in this week, and includes an overarching strategy along with a realistic timeline.
A financial advisor can offer a number of potential strategies to you and help you figure out which one may be the most ideal fit for your financial situation now and in the future.
4. Get help with financial troubles and prevent them in the future.
Many people turn to financial advisors after a serious (and sometimes unexpected) financial loss.
Your advisor can offer you suggestions to speed your recovery from a financial calamity, and can offer you recommendations to avoid future pitfalls.
Many financial mistakes can be prevented with the right knowledge and experience on your side. That is what an advisor can bring to the table.
5. Handle a financial windfall.
Conversely, if you come into a lot of money fast (i.e. through inheritance or a lottery win), that is also a situation which calls for a financial advisor.
It is very common for people who suddenly find themselves with a lot of extra cash to blow through it within a few years or even less time than that. You can find many stories about lotto winners who were broke within a year because they had no help in managing their money.
By talking to an advisor, you can learn how to manage your increased net worth so that you can continue to grow your newfound wealth.
6. Save time and mitigate uncertainty.
Researching retirement options or managing any other aspect of your finances is time-consuming. Both the variety of options available to you and the uncertainty associated with each of them can be daunting and stressful.
When you work with a financial advisor, you have someone there to explain all of your options to you clearly and succinctly.
That person can also conduct research on your behalf into specific possibilities, saving you a tremendous amount of time.
Because an advisor can walk you through the pros and cons of various investment options knowledgeably, you can understand the level of risk associated with each.
That means that when you do go to invest, you are walking into the situation well-informed.
Having a knowledgeable professional on your side can thus save you from a lot of everyday stress managing your money.
7. Prevent emotional decision-making.
One of the biggest dangers of managing your money on your own isn’t lack of knowledge, but lack of self-control.
With enough research, you probably can learn to understand your options clearly.
But it can be difficult to set your most desperate hopes and fears aside when making financial decisions.
Those emotions can mislead us, causing us to take high risks—or sometimes, in other cases, to avoid calculated, modest risks.
Both can be irrational, and both can ultimately cost us money.
But when you work with a financial advisor, you have someone to talk to who is not emotionally invested in your situation.
Because that person can take a step back and look at your situation through objective eyes, you can receive advice which can help you to avoid mistakes from poor emotional regulation.
There is no overstating how vital this can be, especially if you are someone who is especially risk-averse or has a hard time saying no to a gamble.
Find the Right Financial Advisor Now
Now that you know a few reasons why a financial advisor can be essential in helping you achieve your goals, how do you find the right one?
To make it easy for you, we have created a matching service. Just click the button below to locate an advisor who can discuss and realize your financial goals.