At what point should I use a financial advisor?

Experts say it makes sense to hire a financial advisor in the following circ*mstances: You don't have the time or inclination to manage your finances . You experience a major life event, such as a marriage, divorce, loss of a spouse, birth of a child, relocation or change in your employment status.

At what net worth should you hire a financial advisor?

Generally, having between $50,000 and $500,000 of liquid assets to invest can be a good point to start looking at hiring a financial advisor. Some advisors have minimum asset thresholds. This could be a relatively low figure, like $25,000, but it could $500,000, $1 million or even more.

Is it wise to use a financial advisor?

Not everyone needs a financial advisor, especially since it's an additional cost . But having the extra help and advice can be paramount in reaching financial goals, especially if you're feeling stuck or unsure of how to get there.

Do I have enough money for a financial advisor?

If you have less than $50,000 of liquid assets then you may also want to consider going at it on your own as the fees might not be worth it . With that said, financial advisors can bring a wealth of information and experience to the table that can make a huge difference in your potential return.

What to avoid in a financial advisor?

If a financial advisor you previously trusted exhibits any of these behaviors, it is worth having a conversation with them or even considering changing advisors altogether. They Ignore Your Spouse. ... They Talk Down to You. ... They Put Their Interests Before Yours. ... They Won't Return Your Calls or Emails. More items...

How much money should you have before talking to a financial advisor?

Depending on the net worth advisor you choose, you generally should consider hiring an advisor when you have between $50,000 - $1,000,000, but most prefer to start working with clients when they have between $100,000 - $500,000 in liquid assets.

Should I Use a Financial Advisor? | One Smart Dollar (2024)

Many investors are reluctant to pay for financial advice, but a good independent financial advisor (IFA) will use their knowledge and years of experience to help you make important decisions that fit your particular circ*mstances.

Investors are flooded with information and it can sometimes be quite a daunting experience to go at it alone. You might not always need or want an IFA, but they can often be the key factor in your financial success. Here are five scenarios where consulting an IFA would be beneficial to you:

Table of Contents

You want to develop a financial plan, but you don’t know where to start

An IFA will help you identify your key goals and develop a long-term, objective driven plan. Always consider your long-term needs when making an investment. Retirement savings, education, healthcare costs and which investment company to invest in, can have a huge impact on your long-term plans. An IFA can shape these commitments into realistic goals and help you stay focused during uncertain times. Remember, you only change your plan if your goals or circ*mstances change.

Also Read: 7 Questions to When Choose Between a Financial Advisor and Robo-Advisor

You’re having trouble choosing the right investment product

The number of products available to investors is truly astounding. So much so that choice itself becomes a barrier to entry. It’s of the utmost importance that you understand the fine print of the products you are considering. Not all investment products will suit your objectives. Some have certain restrictions, while others offer tax benefits. Therefore it is important to be aware of the details before committing.

Your circ*mstances have, or will, change

Some life events change everything: Marriage, children, divorce, death in the family and retirement can introduce new challenges into your life. Managing your money during these life stages can be confusing and balancing responsibilities can be hard. Seeking financial advice can help you navigate through the confusion and questions, which arise during these huge changes.

Also Read: How Much Should I Have in my 401k?

You don’t know what to do with your retirement ‘windfall’when changing jobs

It is important to preserve your retirement savings. People often withdraw their retirement savings when changing jobs, which can cause a setback in their retirement plans. When you withdraw your retirement savings you miss out on future compound interest and often end up spending the money. An IFA will help you stay on track with your long-term plan and curb any impulsive spending.

You have debt

You have to prioritize paying off your debt before making any investments. If you’re having a problem getting out of debt on your own, consult a debt counselor. They will help you develop a plan to tackle your debt. However, not all counselors are alike. You should only consult someone who is qualified and registered to offer counseling services.

Wrapping it up

It’s important that you take a cold hard look at your finances. This can be tough since many of us don’t want to face the reality of our financial situation. Critical self-evaluation is the vital first step to making sound long-term financial decisions. Ignorance of our financial situation can keep us from admitting we need professional help.

Investing on your own isn’t impossible, but for some, it can be tough. An IFA offers you objectivity and experience, which are invaluable assets when it comes to facing challenges and adhering to your plan.

Sean Bryant

Sean Bryant created OneSmartDollar.com in 2011 to help pass along his knowledge of finance and economics to others. After graduating from the University of Iowa with a degree in economics he worked as a construction superintendent before jumping into the world of finance. Sean has worked on the trade desk for a commodities brokerage firm, he was a project manager for an investment research company and was a CDO analyst at a big bank. That being said he brings a good understanding of the finance field to the One Smart Dollar community. When not working Sean and his wife are avid world travelers. He enjoys spending time with his two kids and dog Charlie.

Latest posts by Sean Bryant (see all)

Chase Freedom Unlimited Review - September 17, 2019
Planning For the Future? Is Life Insurance Apart Of It? - July 6, 2019
9 Ways to Save Money on Golf - July 5, 2019