If the prospect of Excel spreadsheets, budget tables, and tax returns bore you to tears, you might be wondering, “should I get a financial advisor?” Managing and planning your financial life isn’t easy. It’s more difficult now as inflation rises and stocks fall...
If the prospect of Excel spreadsheets, budget tables, and tax returns bore you to tears, you might be wondering,
“should I get a financial advisor?” Managing and planning your financial life isn’t easy. It’s more difficult now as
inflation rises and stocks fall, even before considering upcoming changes to tax audits as the IRS hires thousands of
There are so many options for growing your net worth and preserving your financial future that it can be overwhelming.
One thing is sure, though – not being wisely consistent and early could
be the difference between sitting on a Hawaiian beach during retirement or working as a greeter in a discount
department store well into your old age. If that prospect scares you, you might need to find a financial advisor.
What to Look for When Choosing a Financial Advisor
Before you decide whether a financial advisor is right for you, we need to explain what a financial advisor is. Many
shady businesses are designed to trick you into thinking they’re financial planners but exist to separate you from
your money instead of helping you grow it.
First, let’s look at what a financial advisor is not. If they’re billing themselves as a retirement planner, financial
professional, or an insurance specialist – they aren’t what you’re looking for.
To be called a financial advisor, you need credentials. These are certifications from a third-party, professional
organization that shows the planner has worked a certain number of hours in the field and passed competency
tests. You’ll want to look for certifications like Chartered Financial Analyst (CFA), Certified Financial Planner (CFP),
or Certified Public Accountant (CPA). A CPA can also directly help with tax planning if you’re looking for a one-stop
Aside from credentials, you’ll want to ask whether the financial planner is also a fiduciary. Fiduciary means that
they are legally required to act in your best interest and to manage your money with that protection as their
number one priority.
What Services does a Financial Advisor Provide?
Knowing whether to get a financial advisor depends on your financial needs. In general, though, no matter what
those needs are, you will likely find an advisor who specializes in it or can help you reach your specific goals. Some
of the most common services or assistance that advisors will provide are:
Budgeting and debt.
As we said, financial advisors can assist with most financial and money-related matters
and goals, but everyone is different.
Some other areas of expertise might include:
o Tax assistance and planning.
o Insurance management – even if the advisor isn’t selling insurance, they can help monitor your
policy to ensure you have the coverage you need.
o Estate/legacy planning.
o Emergency management.
o Charitable giving.
o Small business advice.
o A second opinion – if you are comfortable with finances and investing but want to see what a
professional thinks, advisors can do one-time consults.
o Other life event planning – marriage, starting your first job, and nearly every significant lifestyle
change that impacts finances.
Should you get a Financial Advisor?
Maybe. Only you know your comfort level and familiarity with your finances and financial goals. In general, a
financial advisor can help tremendously in achieving those goals, no matter how complex. When selecting an
advisor, ensure that they looking out for you and your future!
Do you still need more information before deciding whether to hire a financial advisor? In Part II, we’ll cover:
1. Drawbacks to hiring a financial advisor.
2. Whether financial advisors are worth the cost.
3. What questions to ask a prospective financial advisor.
But is a budget the correct answer in every circumstance or an easy copout that takes the hard work out of managing finances? The bottom line is that, no, generic advice to budget is not only unhelpful but can be actively detrimental to your wealth and well-being.