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Do You Need to Hire a Financial Advisor?

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Most individuals consider hiring a financial advisor only when their financial matters become increasingly complex, or when they’re going through a significant life transition. However, consulting a financial advisor is also beneficial for basic financial needs, such as growing and managing your finances, building an investment portfolio tailored to your financial goals, etc. The financial professional can not only help you make timely and appropriate financial decisions, but also avoid costly financial mistakes in the long run. Since hiring a financial advisor is a big decision, it is advised that you take time in assessing your financial needs in order to find the best financial advisor for you.

Here are 7 common signs that suggest you may need to hire a financial advisor:

1. You need an advisor if you lack the time or expertise to manage your finances

Lack of time can be one of the biggest challenges while trying to reach your financial goals, which can also impact your ability to build an appropriate level of financial expertise to make investment decisions. If you cannot find sufficient time to manage and grow your finances, it may be a sign that you require the services of a financial advisor. A financial advisor can assist you in researching the most suitable investment options based on your unique financial requirements. By simplifying the process of managing and growing your finances, they can help decrease your overall cognitive overload and provide peace of mind.

2. Hire an advisor if you are nearing retirement

It is advised that one should ideally start saving for retirement as early as possible. By doing so, you can take advantage of the power of compounding and significantly boost your retirement savings. However, in a lot of cases, people do not begin saving for retirement until it is too late. This hampers their ability to build a substantial retirement corpus, as the returns are more likely to be lesser than what it could have been if they started a few years in advance. Additionally, most individuals do not take into consideration the additional expenses that they will face as they near retirement, such as rising healthcare expenses. A financial advisor can be beneficial for individuals nearing retirement, as they can provide timely advice and guidance to ensure you are equipped to handle any unforeseen costs. Through the right questions and a good understanding of your financial situation and future retirement needs, they can get a full picture of your goals for retirement and how they can help you achieve them.

3. Hire an advisor if you do not feel confident about your money management skills

Money management requires handling your budgeting, saving, and investing goals while also taking into consideration external factors such as future health expenses, rising inflation, market volatility, etc. You also need to be careful, as one wrong decision can have a negative impact on your overall finances. Hiring a financial advisor can help by keeping a close grip on your current finances while also ensuring that you are on track to achieving your future financial goals. Additionally, the advisor can also help you adjust your financial strategy periodically to ensure your funds are secure during phases of market volatility.

4. If you have specific financial goals, but don’t know how to achieve them, you need an advisor

Most individuals have a set of financial targets that they wish to achieve in a given time frame, but aren’t confident of the best methods they can use to achieve them. These targets could be related to saving for a retirement fund, buying a home, paying for college tuition, etc. Any major investment, withdrawal, or expenditure will have a significant impact on your financial requirements. A financial advisor can help in this situation by addressing your financial goals and risk tolerance, and accordingly providing appropriate advice and actions you can take to work towards those goals.

5. You will need a financial advisor if you have inherited a sizable estate or legacy

If you have received a large inheritance in the form of a substantial corpus, real estate, art and antiques, jewelry, or more, you may have to deal with inheritance taxes and complex financial and legal issues. A financial professional advisor can help you avoid any tax liabilities that may arise as a result of your newfound inheritance, and also advise you on how to wisely handle these assets. The professional may also help you navigate through any potential family feuds or business concerns that may arise at the time.

6. If you have recently begun investing and are feeling lost, a financial advisor can help

Investing can feel overwhelming and confusing for beginners due to the number of investment instruments available to choose from such as stocks, bonds, mutual funds, real estate, annuities, ETFs, and more. You may also find it challenging to evaluate the risk profile and tax implications of the aforesaid investments. Hiring a financial advisor is recommended at this stage, as he or she can recommend suitable investment options to you based on your risk profile and your future financial needs and goals.

7. Hire an advisor for major life changes like marriage or divorce

A change in a personal situation, especially in the case of getting married or filing for a divorce, may involve financial repercussions. In the case of a marriage, you need to consider issues such as handling debt, if you keep your accounts separate or merge them, how to deal with taxes, and so on. On the other hand, if you are considering a divorce, you have to take into account factors such as splitting of assets, alimony, and prenups. To handle the financial aspect of such a situation, you may consider engaging a financial advisor who can help suggest the most suitable course of action for you, while preserving your assets.

To conclude

Growing and managing your finances requires continuous effort, time, and resources. Hiring a professional financial advisor may afford you peace of mind, as they have the expertise and knowledge to effectively grow your finances and help you tackle any financial uncertainties. It is prudent to take the time to assess your financial needs to determine if you require the services of a professional to manage your finances, so you may take action sooner rather than later. If you are looking to hire a financial advisor, consider using the free advisor match service get matched with 2-3 financial advisors. Answer a few basic questions about yourself, and the match tool will help connect you to an advisor that is suited to meet your specific financial requirements. The service is free, and you have no obligation to hire any of the advisors.