7 Reasons Why You May Need to Hire A Financial Advisor

Not everyone has the required financial expertise or knowledge to manage their finances. Even if you may wish to go down the do-it-yourself route, it would take an extensive amount of dedication, time, and effort on your part to acquire the necessary skills needed to make informed financial decisions. However, not everyone has that luxury. If you choose to hire the services of a professional financial advisor, he can not only help you pick the right investments to boost your retirement savings but can also help you lower your taxability, create an estate plan, or attain your short and long-term financial goals.

With that said, a lot of people may not require the services of a financial advisor. They may have their finances in order, contribute regularly to their retirement accounts, have little to no debt, and are merrily working towards achieving their financial dreams. But not everyone can say the same. A lot of folks who may benefit from seeking help from a professional do not reach out to them or believe they do not require it.

In this article, we will discuss the different signs that you should look out for to determine whether you need to hire a financial advisor or not: 

What are the different signs that indicate that you may need a financial advisor?

To make informed financial decisions and effectively manage finances, one requires sufficient financial expertise and knowledge. A financial advisor devotes ample time to assess the feasibility of various financial investments, consider their options to deduce the suitability of the investment as per the risk profile of their client, and subsequently deploy their strategy. Let us find out the different signs that may indicate you require professional help to manage your finances.

1. You are nearing retirement

It is advised that one should start saving for retirement as early as possible. By doing so, you can give your investments enough time to harness the power of compounding and build significant retirement savings. However, a lot of folks overlook saving for retirement until it is too late, leading them to miss achieving their retirement goals.

You need to take stock of your finances and factors such as the rate of inflation, the rising cost of healthcare, and the tax rate when it comes to retirement planning. By hiring the services of a financial advisor you may be able to build a substantial retirement corpus and deploy certain strategies that may help you financially secure your retirement years and live with a sense of comfort.

2. You have insufficient time on hand to manage your finances

Not having sufficient time to look after your finances due to extensive work hours or an inability to gain financial knowledge due to lack of time can prevent you from reaching your financial goals. This is a clear sign that you require the help of a professional financial advisor.

There is a vast array of investment instruments available in the market. To select the right investment option that suits your risk appetite and may help you earn high returns, you may require the guidance of a financial expert. The advisor can build an investment portfolio aligned with your risk profile to achieve your financial goals.

3. You are new to the world of investing

Investing can sometimes be overwhelming for new investors. It is okay to feel confused or overwhelmed when you are going through the different investment choices available to you - bonds, real estate, index funds, stocks, mutual funds, annuities, ETFs, etc. Before choosing to invest, you need to assess the associated risk and tax implications of all these instruments. This can be challenging. However, you need not fret. You can engage a competent financial advisor who can select the right investments for you and help you build a customized investment portfolio based on your risk tolerance, future aspirations, and goals.

4. You are unsure about your money management skills

Before beginning your financial journey, you need to consider several factors such as whether you are married or divorced, have kids or not, your health, existing debt, a ballooning expense budget, inability to stick to a budget, and more. Managing finances requires a steady hand that can carefully steer the ship during times of market volatility. In such cases, you require the assistance of a qualified professional who can lend you a guiding hand to help manage your finances. 

The advisor can also help consolidate your finances spread across different retirement accounts, investments, and institutions. Doing so would help you get a clearer picture of your finances and know whether you are on track to meet your financial goals or not.

5. You have either gotten married or are filing for a divorce

It is tricky to enter into marriage or go for a divorce if you pause to consider the financial implications of your decision. It requires tackling some hard questions related to debt, management of finances, taxes, and more. Further, you need to think about how you would handle the division of assets, alimony, child support, et al in case of a divorce. This can lead to severe erosion of your finances. To ensure you are protected from a financial standpoint, you need to consider hiring a financial advisor who can determine the best course of action for all the involved parties.

6. You have set certain time-sensitive financial targets for yourself

Every individual has a set of short and long-term financial goals that they wish to achieve. It can be buying a home, a new car, saving for your child’s college tuition, or building a large retirement corpus for yourself. Each of these goals requires a dedicated strategy where you need to make the right moves in the market to achieve them. If you reach out to a financial advisor, he can help you design a plan to achieve your targets and ensure that you are on the right track by building a well-diversified portfolio for you.

7. You have received a large inheritance

Inheritance can be a bit tricky to manage due to having to deal with ensuing legal and tax complications that may occur. To manage these financial complexities, it is advised that you take help from a qualified professional. The core objective should be growing your funds and making profitable investments rather than making unwise decisions and indulging in wasteful spending. The advisor would be able to sort out any issues pertaining to taxes and ensure you invest your inheritance in the right investments.

To conclude

There are several reasons why you should consider hiring a financial advisor. Apart from the financial knowledge, expertise, and years of experience that an advisor brings to the table, he also helps plan your finances, tackles emergencies, and prepares you for retirement. An advisor can also work on a plan to eliminate your debt and minimize your tax liability. They can also help you with budgeting and ensure that you stick to your budget.

So, if you’re looking for a financial advisor who can help you achieve your financial goals, manage your finances, create a customized investment portfolio, build a substantial retirement nest egg, and boost your wealth, use the free advisor match service to search for fiduciary advisors near you. Based on your requirements, the match tool will connect you with 1-3 advisors suited to your unique financial needs and goals.