To Top

Do You Really Need a Financial Advisor? The Answer Might Surprise You

Need For Financial Advisor

Nowadays, there are numerous resources ranging from blogs to investment apps to even robots that offer financial advice to individuals. The existence of these resources tends to make it easy to hold a conclusion that there is no need to consult a human financial advisor anymore.

However, several financial experts have opined that even with those resources, people still need to consult human financial advisors. According to Mercer Bullar, a law professor at the University of Mississippi School of Law with a specialty in securities, people need to meet a financial advisor so they can have a complete picture of their finances.

several financial experts have opined that even with those resources, people still need to consult human financial advisors.

Thus, there are some specific situations when you still need the services of a financial advisor. They include:

1. Periods of Major Changes in Personal Life

Milestone periods in your life such as when you newly get engaged or get married or when you are expecting a baby are periods when you should consider seeking the services of a financial advisor. According to Zaneilia Harris, the president of Harris and Harris Wealth Management, those are the periods when one has to begin having money conversations.

Harris noted that if you are dating someone and you feel things are getting serious, then that might be a good time to visit a financial planner. Harris indicated that disagreements and mistakes about money could destroy relationships and it is, therefore, better to talk about money matters with your partner. Your financial planner will also make it easy to determine your nuptial agreement terms and even getting a changed tax status.

Harris further stated that if you are having a baby, having an advisor who is an independent third party could also be a good way to manage this addition to your family. According to him, your financial advisor will help you in working out things such as affordable childcare and the appropriate period to begin college planning.

2.  When You Experience An Upgrade in Income

In a case where you get a well-paying job or get promoted or inherit a considerable sum, deciding how to plan your finances without the help of a financial advisor can be difficult. The founder of Your Greatest Contribution, Rianka R. Dorsainvil noted that one needs to put the extra income to a specific job, so one does not end up misspending. The extra income should be used for important financial commitments such as settling of debt, paying off bills, saving up or investing. To make the best use of the extra income, the inputs of a financial advisor comes in handy.

3. A Financial Advisor Can Serve As Your Emotional Backbone

Some people are emotionally strong even in the face of threatening financial turbulence. For instance, some individuals remained unperturbed by the financial crisis in 2008. Those people do not particularly need a financial advisor to help them maintain objectivity.

However, the author of Investors Manifesto, William Bernestein, noted that a lot of people still need an external source to calm them down. Bullard also noted that most financial advisors have what it takes to force out honesty from you concerning your finances. For instance,  he highlighted that quite a lot of potential retirees tend to overestimate the total number of years they would continue to be in employment.  According to him, several people try to ignore the statistical odds that are hinged on things they do not know. A financial advisor could serve as an objective party in such situations.

Selecting A Financial Planner

You should ask a prospective financial advisor about his/her certification, experience and method of compensation

Some financial advisors can cause additional harm than when one relies on personal instincts. A CPA or a person who holds an MD is generally expected to exercise a considerable standard of care when dealing with clients. However, with investment advice, Anthony Badillo of Gen Y Planning suggests that a client should ask three questions from any prospective financial advisor. These questions include asking for the advisor’s certification, asking about the advisor’s experience and the compensation method of the advisor.

Financial experts have advised that one should seek for a fiduciary, i.e., a person who is ready to give priority to your needs. That could include offering solutions that are lower cost instead of the ones that take exorbitant fees.  Bernstein stated that if a financial planner isn’t willing to sign such fiduciary agreement, then that person isn’t right for you.

There is a popular misconception that only the wealthy individuals need financial advisors. However, sources indicate that a lot of financial advisors would work even with people without significant amount for investment.

More in Financial Advisor

You must be logged in to post a comment Login