Should You Consider a One-Time Financial Plan from a Financial Advisor?

Engaging with a financial advisor is often portrayed as a strategic move to enhance financial security with tailored advice. While the idea of a continuous partnership with a financial advisor is commonly promoted, you may still wonder if it is necessary to hire the services of a financial advisor regularly or if their expertise can be tapped into on a one-time basis. A financial advisor is essential for day-to-day financial decisions. But their services can also be utilized effectively by hiring them for isolated needs. No matter what you choose, it is vital to understand the advantages and disadvantages of opting for a single, comprehensive financial plan provided by a financial advisor and compare it with ongoing financial advice from a professional.

This article can help you understand the merits of considering a one-time financial plan from a financial advisor and whether it is the right option for you.

Should you consider one-time financial advice?

Before deciding whether or not you need one-time financial advice, you must first understand what a one-time financial plan entails. A one-time financial plan is a targeted and comprehensive analysis of your current financial standing. It is the opposite of an ongoing advisory relationship and includes a one-time meeting with the financial advisor.

During this designated meeting, you have the opportunity to get into the specifics of your financial situation. You can seek guidance on areas of concern, such as chasing financial goals like retirement, or areas of improvement, such as taxes and debt. A one-time arrangement operates on a fee-based structure. You compensate the financial advisor for their time and expertise during the consultation. There is no obligation or commitment to attend subsequent meetings. Once the consultation ends, you retain the flexibility to determine the extent of your ongoing engagement with the financial expert.

Now that you know how a one-time financial plan works, you need to decipher whether you should consider it. Here are some benefits of one-time advice that can help you make up your mind:

1. A one-time financial plan is ideal for addressing specific financial concerns

When confronted with pivotal life-changing financial decisions, one-time financial advice can be particularly beneficial. A focused consultation with a financial advisor gives you the necessary insights to navigate complex processes. It ensures that you make sound financial decisions at a crucial phase of life. A one-time financial plan can address specific, impactful financial decisions with tailored insights and guidance precisely when you need it most.

For instance, consider the scenario of claiming Social Security benefits in retirement. Deciding when and how to initiate these benefits can significantly impact your long-term financial well-being. If you claim them too early, you miss out on higher checks later. However, waiting too long can force you to live below your means in the initial years of your retirement. A one-time financial plan allows you to navigate this decision strategically. The financial advisor will likely take into account your circumstances, retirement goals, and potential tax implications. Through this focused approach, they can lead you towards an informed choice that aligns with your broader financial objectives in a single consultation.

Consider a different example where you are purchasing a home in a high-interest-rate environment. This can present a unique set of challenges. A one-time financial plan can offer a tailored approach to assess your financial readiness by considering factors such as mortgage rates, market conditions, and your overall budget. Tapping into the insights of a financial advisor for this specific decision can help you optimize your approach to home buying.

Another crucial financial decision that warrants a targeted approach is evaluating your insurance needs. Insurance is a vital aspect of sound financial planning. A one-time financial advisor can comprehensively review your current insurance coverage. They can help you address your life, health, car, and property insurance needs, among others. Expert guidance in a single session enables you to tailor your insurance portfolio to protect your assets and loved ones adequately and mitigate potential financial risks.

2. One-time financial advice can help you save time and money

One-time financial advice not only provides valuable insights but can also offer a pragmatic approach that saves both time and money. With no regularly scheduled meetings, you enjoy a higher level of flexibility that can be particularly beneficial for individuals leading demanding careers or managing busy personal lives. The absence of the obligation to meet the financial advisor regularly allows you to redirect the time saved towards more productive endeavors. This can enable you to focus on actively building and managing your wealth. This flexibility makes a one-time financial plan appealing to those who prioritize targeted financial guidance without committing to a long-term relationship.

Moreover, opting for a one-time financial plan can be a more cost-effective choice. Long-term associations with financial advisors can result in ongoing fees. Financial advisors may charge a percentage of your profits or a fixed monthly charge. Such recurring costs can accumulate over time and impact your monthly budget. In contrast, a one-time financial plan costs relatively less. It involves a single upfront fee. So, you do not need to budget for recurring costs associated with ongoing financial advisory services. This cost-effective approach allows you to access the necessary financial advice without the burden of continuous financial outlays.

3. One-time financial advice can be ideal if you are just starting out

One-time financial advice holds appeal for individuals just starting on their financial journey. This is when your portfolio is in its infancy and does not require constant management. In the initial stages of financial planning, the need for ongoing, intricate financial advisory services may be limited. A one-time consultation with a financial advisor can serve as a pivotal starting point and offer a foundational understanding of the necessary steps and considerations for your future.

You can look at this time as a formative phase. During this phase, a single meeting with a financial advisor can allow you to assess your goals, gain insights into different financial products, and comprehend the risks associated with investing. This targeted consultation can equip newcomers with essential knowledge and lay the groundwork for informed decision-making in future financial endeavors. You can simply take a meeting, absorb valuable insights from the professional, and then formulate a personalized financial plan that acts as a roadmap for achieving your goals.

One-time financial advice can provide a concise yet comprehensive overview of the fundamental aspects of financial planning. This approach can be beneficial for navigating the initial complexities of investment and financial decision-making.

4. One-time financial advice can be ideal if you receive a large sum of money

Receiving a substantial windfall, such as through an inheritance, a large bonus, a lottery, a gift, or another significant financial event, can be both exhilarating and daunting. While many investors believe in the Do-It-Yourself (DIY) approach to managing their finances, the dynamics considerably change when dealing with substantial sums. In such cases, a one-time financial advisory session can prove to be an invaluable resource.

Managing a large influx of money can pose unique challenges if you are accustomed to self-directed investing. While you may possess a certain level of financial planning knowledge, the intricacies of handling significant amounts require a more nuanced approach. Engaging in a one-time consultation with a financial advisor at this juncture can provide you with crucial insights into optimizing the use of your lump sum funds. A financial advisor can offer you guidance on various aspects, including tax implications, identifying the best investment opportunities, and channeling the funds toward specific financial goals.

Professional advisors can help you understand the nuances of taxation to minimize your liabilities and ensure that you retain more of the windfall. Moreover, the financial advisor can assist you in crafting a tailored investment strategy that aligns with your risk appetite, time horizon, and financial objectives. Beyond investments and taxes, the financial advisor can also impart valuable knowledge on strategically allocating funds. This may involve prioritizing debt repayment, contributing to retirement accounts, or creating an emergency fund. One-time financial advice can serve as a crash course on the best way to use money and guide you on avoiding unnecessary expenditures. This can ultimately ensure that the newfound wealth contributes meaningfully to your overall financial well-being.

While the DIY approach can work for many investors, a one-time financial advisory session becomes particularly crucial when managing substantial amounts. The insights gained from this consultation can empower you to make informed decisions, circumnavigate the complexities of handling large sums of money, and set a solid foundation for your financial future.

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When should you not consider a one-time financial plan?

Here are some situations when you should consider hiring an ongoing financial advisor over one-time financial advice:

1. When you have little to no knowledge of personal finance

If you have little to no knowledge of personal finance, making financial decisions independently can be catastrophic. Managing your income, making optimal investment choices, minimizing tax liabilities, and mitigating risks can be overwhelming without a foundational understanding of financial principles. In such cases, seeking the ongoing guidance of a financial advisor becomes paramount. An advisor can be a knowledgeable ally and help you comprehend the complexities of personal finance. They can help you make informed choices aligned with your goals and avoid potential pitfalls that could jeopardize your financial well-being. By understanding your aspirations, lifestyle, and long-term goals, your financial advisor can customize recommendations that suit your unique circumstances.

Their role goes beyond giving advice. It also involves educating and empowering you, which fosters financial literacy in the long run and makes you self-sufficient in the future. Thanks to this collaborative relationship, you gain the confidence and skills to make sound decisions that can help you not just at the time but also in the future.

2. When you have multiple simultaneous life events

You may need ongoing financial advice when you are dealing with several important life events happening at the same time, like retiring while your child heads off to college. Balancing the financial needs of these significant events requires constant strategic planning. Take, for instance, funding your child's college education and securing a comfortable retirement. Both of these activities need careful thought. Continuous financial advice helps you create a thorough plan that considers the unique financial demands of each situation. This includes figuring out how to draw money, using smart tax strategies, and deciding when to sell your investments strategically.

Firstly, you will need funds to support your child's higher education. Simultaneously, you will have to secure funds for your retirement to ensure a comfortable and worry-free post-work life. Next, you may witness complexity in planning your withdrawals from your financial accounts. This will require you to strategize how much money to take out and when to ensure that both your child's educational needs and your retirement goals are well-aligned.

But that is not all. You will also have to pay attention to tax strategies during this crucial time. Additionally, as you start to fund these life events, the need to liquidate your assets will also arise. This process will require careful strategizing to ensure the liquidation process is well-timed and does not jeopardize your long-term financial security.

The dynamic nature of handling multiple financial priorities may require an ongoing relationship with your financial advisor. This can ensure that all aspects of your financial life are well-coordinated and optimized so you make the most of your resources.

3. In case of fluctuating economic conditions 

In the face of economic uncertainties, ongoing financial advice emerges as a valuable resource. It provides you with the necessary guidance to adapt your investment strategies, make informed decisions, and eliminate poor judgments that can cost you in the long run.

The past few years have seen a cascade of economic challenges marked by a series of impactful events. The onset of pandemic-induced volatility was the first significant upheaval. As global uncertainties soared, markets all over the world experienced unprecedented fluctuations. This further led to panic with sudden and unpredictable changes in asset values. The next challenge emerged with the surge in inflation. Inflationary pressures further heightened market complexities, affecting the purchasing power of money. For investors seeking to preserve and grow their wealth, adapting to the inflationary environment required continuous adjustments to their financial strategies.

The geopolitical tension between Ukraine and Russia introduced another layer of uncertainty into the financial markets. Geopolitical events often trigger market reactions, causing fluctuations in asset prices. Ongoing financial advice becomes instrumental in helping investors realign their portfolios and ensuring that their investments withstand the erosive impact of rising prices, heightened political risk, and geopolitical uncertainty.

Ongoing financial advice provides you with insights to navigate these complex scenarios. During such times, the need for continued financial advice is paramount. Financial advisors play a crucial role in helping you reassess your investment portfolios, devise strategies to safeguard your financial positions, and make prudent decisions that can eliminate the potential adverse effects of an economic downturn. Continuous engagement with a financial advisor allows for timely adjustments to investment strategies. This proactive approach mitigates the risk of making hasty financial decisions influenced by short-term market fluctuations.

To conclude

While a one-time financial plan can offer immediate benefits such as cost-effectiveness and time efficiency, it should not be perceived as a one-size-fits-all solution. A single consultation can indeed help you kickstart your financial journey. It can provide valuable insights and strategies to get things moving. It serves as a prudent option, particularly for specific scenarios like receiving a lump sum of money or facing a critical life decision. However, it is crucial to acknowledge that your financial situation, as well as external financial conditions, will evolve over time. As life brings forth new challenges and opportunities, you may require ongoing financial advice at some point. The dynamic nature of personal finance, market fluctuations, and changing life circumstances make it essential to have continuous support and guidance.

The key lies in timing and evaluation. Assessing where you currently stand in life, understanding your financial goals, and considering the complexity of your circumstances can help you decide how often you need to engage with a financial advisor.

Use WiserAdvisor's free advisor match service to find a vetted financial advisor for your one-time financial plan considerations. Simply answer a few questions about your financial needs, and our matching tool can connect you with 2 to 3 advisors who are most suitable for meeting your financial goals.