Do I Really Need an Advisor?


The answer is, it depends. That may sound surprising since I enjoy advising people on financial matters, but not everyone is in need of professional financial advice.  It really starts with understanding what type of financial advice would benefit you since there are different types of advisors.  For example, there are some advisors who offer financial planning as part of a suite of services, while

others might offer investment planning as their core service.  When it comes to financial planning, some people need it, some do not. If your current situation consists of cash flows where your income exceeds your expenses, all of your financial goals have been achieved, and you have no financial quandaries  related to debt, taxes, estate planning or any other topic, then you probably don’t need someone to develop a financial plan for you.  Why complicate things if you’re living your life and your financial resources are structured in a way that’s working for you. The same goes for investment planning. If you feel the return you’re getting for your chosen time horizon (short, mid, long term) is appropriate  as compared to a particular benchmark, and you’re comfortable with the risk in your portfolio (Click here to do a quick Risk assessment on your holdings), then why pay additional fees for investment management services.

Of course, if think you’re in good shape, but you’re not 100% confident, then it makes sense to pull in a qualified advisor who can give you an objective assessment of your situation.  Beware of the “advisor” who pokes holes in your financial life as a way to suggest products that will help you. Usually that person is really a salesperson using financial advice as bait to sell their products.  Authentic Fee-Only financial professionals will always be product agnostic, and legally must act as a fiduciary, meaning your best interest is the only thing that guides them.  If your financial life is in good order, a good financial planner will ascertain this through their data gathering phase, and should validate your good standing.

There are many situations when you should partner with a trusted and legitimate financial advisor.  I tell people there are three situations that should cause you to consider the services of an advisor.

  1. You have financial goals but no idea how to reach them
  2. You need help determining what your financial priorities should be
  3. You want someone else to handle it all

The type of help that you might need is out there if you need it. Most advisors will at least do a complimentary discussion to learn about your needs and to explain their services.  Don’t be afraid to ask a lot of questions. Here’s a list to get you started.