Are financial advisors worth it?
While I fancy myself as knowing a thing or two about money, especially the taxation of said money, I know enough to stay in my lane when it comes to providing financial advice. But when you do estate planning, people are going to ask you what you think about financial planners.
Someone recently asked me the question and here was my response: It depends. So you're thinking, stellar advice Addie. But hear me out. Not everyone needs a financial advisor, but a lot of people would benefit from working with one.
Here are a few signs you may need a financial advisor:
You need some accountability.
We always mean to budget. I purposely did not go look at the Amazon Prime Day sales. But just because you know you should do something, doesn't mean you will. A financial advisor can keep you on track for your long-term financial goals.
You could use an unbiased third-party opinion.
If you find yourself saying, I can't lose on this investment, you might want to see a financial advisor. We all get rose-colored glasses on and think that our investments will work. Sometimes an unbiased third party can point out risks that you may not have realized. You may still go through with it, but you'll have more information.
You don't have the time (or desire) to learn about personal finances.
If you've got so much going on that you poured cold brew into your kid's chocolate milk (guilty!), then you probably have some time constraints. Or maybe it is that you can do it yourself, but you'd rather spend time with your loved ones rather than reading about personal finance. Either way, this is something you can outsource if it is not your jam.
You have a big life event
Maybe you're getting married, or having your first kid, or starting your own business, or retiring, or received an inheritance. You want to make sure you're making the right decisions now to be prepared for the future.
So how do you find a good financial advisor? Ask for referrals! Ask your friends and family members and chances are you will get some really good names. But just because someone is good for your friend, doesn't mean they will be good for you. So interview the financial advisor before you make a decision. Here are some questions to ask:
What services do you offer?
Do you have any conflicts of interest that might bias your advice?
How do you plan to help me reach my financial goals?
What is your investment philosophy?
Have you worked with people like me before? Do you have any experience managing investments like mine before?
What are the costs involved in working with you?
How often will we meet to review progress on my goals?
What is the best way to contact or communicate with you?
Hmm, finding a good financial advisor sounds a lot like finding a good personal attorney. Funny how that works.