Does It Make Sense to Hire a Financial Advisor?
Everyone can use the help of a skilled financial advisor. Managing your money, making big decisions, and creating a financial roadmap are indeed massive tasks. However, the services of a financial advisor do not come cheap.
A comprehensive plan alone costs a couple of thousand dollars and ongoing services will be a few hundred dollars monthly. You can definitely just save this money! But there are certain instances when the expense is worth it. Take a look at the reasons below and make your own judgment based on your current financial situation.
- You need a guide in creating your financial future.
As a young person with limited resources, getting your financial plan together is a priority. There is just too much to do: paying student debt, starting a retirement fund, saving for an emergency fund, buying your first house, getting married, and traveling and enjoying life right now. If this task is overwhelming, it makes sense to invest in a financial planner. Of course, this is an added expense but if you can afford the professional fee without going into debt, this may just be your ticket to a secure financial future.
- You do not want to handle your assets.
Some people are more comfortable with a hands-on approach to managing their money, but others find this a burden. In this case, get a financial advisor to do the work for you. The only catch is you must have enough investable assets to start. If you shop around, the minimum amount can start at $50,000 and this can go up to $1 million before a financial advisor takes you on. But the most ideal level is $100,000. If you have less than this amount, it is better to put your money in a low-cost index fund and you do not even require financial help for that.
- An impartial third-party opinion is valuable to you.
Anyone can DIY a financial plan but no matter how much you learn about investing, Wall Street will always have the upper hand. Also, you are always tempted to make the occasional emotional or irrational decision. You are still human after all. This is where a financial advisor is useful – you get an impartial third party advice and if he or she can save you from at least one bad decision yearly, then the fee would have been worth it.
Evaluate your current financial situation and see whether or not it can be improved with the help of a financial advisor. It is a weighty investment to start but it can be well worth it once you cash in on the rewards.