When and How to Consult a Financial Advisor

When and How to Consult a Financial Advisor

Making smart financial decisions doesn’t have to be something you try to tackle alone. While you might be wary of banks that try to upsell you while ignoring your needs, a good financial advisor will give you options and advice without pushing you into something that is not conducive to your goals. 

Sometimes, it’s best to chat with a financial advisor before making a big move, such as investing in something or choosing to save for retirement. But, if you don’t know where to start, here is all the information you need to know about when and how to consult a financial advisor. 

Where do financial advisors work?

The most accessible place to find a financial advisor would be through your bank. Each branch of your bank will have some financial advisors, so if you need to shop around to find one that best suits you, don’t be afraid to do so. 

While these may be the easiest advisors to find, and they may not charge you anything, they often earn commissions when they sell you something, so they may not be the most genuine. Therefore, it’s ideal to look at brokerages, financial investment companies, and even independent advisors. 

What can a financial advisor do that I can’t do?

A financial advisor’s job is to manage your finances with you and keep track of investment trends and upcoming products. For example, when you start getting into investments, you can lose control of your finances fast if you don’t keep an eye on them. 

They have the time to help manage your funds on your behalf so you can spend your precious time doing other things. They can also help with:

  • Holding you accountable for maintaining your financial goals.
  • Keeping you on track with due dates when things need to be taken care of. 

Furthermore, unless you’ve studied finance, it’ll take you a very long time to learn as much as a financial advisor already knows. Finance is complicated and ever-changing, and working with an expert ensures you don’t miss anything. 

When do I need to consult a financial advisor?

Financial advisors are not only there for you to manage a complicated investment portfolio. They can assist with some of the most essential financial needs. The following are just a few examples of ways a financial advisor can help you. 

When you need to set up a budget

It is never too late to gain control of your finances, and one of the best ways to start is with a budget.

However, budgeting is challenging. A financial advisor can go over your income and expenses, help you determine your goals, and help you work out a realistic and attainable budget. 

When your finances are overwhelming

Controlling finances is extremely difficult and requires skill. With the cost of so many essentials going up dramatically, it can be way too overwhelming to figure out where to start to get control of your finances. 

You don’t necessarily have to have a specific goal in mind to talk with a financial advisor. Instead, let them know you want to gain control of your finances, and they will work with you to give you the tools you need to figure it out from scratch. 

When you’re about to make a financial change

Not having a plan in place when making a significant financial change, such as buying or selling a home or retiring, is one of the fastest ways you can plummet into a financial tailspin.

Therefore, it’s worth speaking with a financial advisor as soon as you start considering a big change, so you know what to expect and can plan. 

For example, a financial advisor can discuss how far your current savings can take you into retirement, as well as help you understand how to manage your retirement savings and investments when the time comes. 

When you want to develop a financial plan

If you have a goal of paying off your debt in five years, retiring at 65, or you want to find a way to consolidate your multiple streams of debt, having a financial plan can help you realistically achieve those goals. A financial advisor can help you develop this plan. 

They can help you look at your financial situation and goals from all angles to ensure a plan is in place if the original plan does not work out. 

When you need general advice on prioritizing finances

There are many ways to spend or save money and prioritizing where to put your money can be a challenge. If you want someone knowledgeable about money to run things by before choosing, a financial advisor can help. 

For example, you might have a hard time deciding whether you want to focus on paying off your debt first, saving money first, or finding a way to do both simultaneously. A financial advisor will work through each decision’s pros and cons to better grasp your priorities based on your current situation. 

No Motivation to Manage Your Finances

Some people thoroughly enjoy everything related to finances, while others just can’t be bothered. Just because you don’t find finances interesting doesn’t mean you want to ignore it and be financially irresponsible. 

A financial advisor can help you ensure that you have a solid financial future with all your accounts kept on track so you can sit back and keep earning money.

It is way too hard to motivate yourself to manage your finances, especially when investments come into play if you don’t find them at least remotely interesting. 

How do I go about consulting a financial advisor?

Many financial advisors are out there, or people calling themselves financial advisors, but are really salespeople trying to sign you up for other financial services.

Therefore, you want to ensure that, first and foremost, the person you are considering working with has credentials and education to back them up. 

Financial firms, financial institutions, brokerages, and insurance agents can all give financial advice. You will want to research what is available in your area and be sure to look for reviews. 

Does it cost money?

It can cost money to consult a financial advisor or planner, depending on where you live.

However, the consensus is that a financial advisor who works on a fee-only model is the one who will be the most honest. Shopping around until you find one that you are most comfortable giving your business to is fine. 

How much money you might spend on a financial advisor will also depend on the type of service you are looking for from them. 

Final thoughts

Money can be the source of so much stress. It can be a whirlwind trying to manage it all on your own. Thankfully, a financial advisor’s purpose is to ensure that you don’t drown in financial uncertainty. Just be sure to research your options in your area thoroughly, so you don’t put your money in the wrong hands.

Image by: [Mohamed Hassan]