With an increasing number of people who have trouble saving and growing their money, the need for financial advisors has never been higher. A financial advisor can help you look at your personal finances from every angle to put you on the best path to get out of debt, save more money, and plan ahead for your retirement years or children’s college tuition. Here are seven reasons why you should hire a financial advisor.
Why do I need a financial advisor?
While you can easily feel overwhelmed by your day-to-day financial responsibilities, hiring a professional business coach isn’t something to be taken lightly. When we talk about needing help with our finances, most of us are really looking for someone to help us make sense of it all: should I invest in XYZ? Why is my credit score so low? How do I get out of debt? A good advisor will ask you questions and help you understand why certain actions need to be taken.
Does it cost money?
Yes. But money isn’t everything. A professional business coach can make all the difference between an average career and an exceptional one. Professional business coaches are experts in their fields, so they can help guide you on what to do next with your career or business. And because these professionals work with plenty of clients at once, you get a lot of extra attention without breaking your bank account. How? By planning in advance and taking advantage of company discounts! (See how below.)
What will my advisor do for me?
The biggest advantage to hiring an advisor is that they are not paid on commission. They aren’t motivated by getting you to buy expensive, unnecessary products or increasing your spending in any way. Rather, they get paid by charging an annual fee for their advice—typically between 0.5% and 1% of your total assets under management, though some advisors charge much more for their services.
How does my advisor get paid?
You may have heard that financial advisors get paid on commission or via loads. However, these are not typical compensation models. Nowadays, an advisor can get paid in any number of ways, depending on his or her company’s business model. The most common is either via fees (like an hourly rate) or commissions (if they are registered reps). Still another way to be compensated is as part of a team.
Is there a difference between an advisor and a planner?
In short, an advisor helps you create and implement financial goals, while a planner creates those goals for you. Your choice of advisor or planner is going to depend largely on your personality and where you are in life—i.e., if you’re just beginning to save or nearing retirement.
Can I handle this on my own?
Before you decide whether to hire an advisor, ask yourself if you are capable of handling your finances on your own. If yes, good for you! Don’t waste your money hiring someone to do what you already know how to do! If no, it’s probably time to call in help.
What’s the best approach to hiring an advisor?
There are many different ways to find an advisor. Some people are matched with advisors by their company’s benefits department or by an insurance agent. Others choose to shop for advice on their own, often starting with recommendations from friends and family or researching financial planners online. Once you’ve settled on a few candidates, your next step is to vet them and choose one that best fits your needs.
There are many different ways to invest your money and, in general, it’s good to have a professional business coach who can steer you in the right direction. With that being said, make sure that your advisor is someone who has your best interests at heart—someone who will not only offer you advice on how to effectively grow your portfolio but also give you actionable strategies on how to do so.