Do You Need a Financial Advisor?

by Miranda Marquit

Sometimes, it helps to have someone knowledgeable look at your finances. There are cases in which a financial advisor can help you create a plan for the future, as well as help you stay on track with a plan you might already have. On the other hand, some people may feel overwhelmed by trying to manage their own investments, and may be better off hiring a professional to help them make the right decisions.

Advantages of Using a Financial Advisor

Do you need a financial advisor?

Do you need a financial advisor?

The right financial planner can help you plot out your road to financial freedom. A financial advisor can come in handy if you aren’t sure how to put a retirement plan into action, or if you feel overwhelmed by your debt situation.

A good financial planner can look at your situation and recommend a course of action that can be beneficial to you in the long run. Your financial advisor looks at your entire picture, and then helps you figure out how to meet your goals.

You need a financial advisor if you start to feel overwhelmed at the thought of working out your own financial future. If you feel as though you are too disorganized, or if there is too much to do in order to get started, you could probably benefit from financial planning help. At the very least, you can get pointed in the right direction.

What about DIY Financial Planning?

Visiting with a financial advisor can be a good move, even if you are a DIY kind of person. Whether you are beginning investing, or putting together a debt reduction strategy, or figuring out how much you need to set aside for college, a consultation with a financial planner can help.

Get some ideas about which direction you need to head, and get some help putting together your plan. There are many reputable financial planners that will assist you in working out a plan you can follow on your own for a flat fee. Then, if you want to make your own tweaks to the plan later you can. Sometimes a second set of eyes can help you avoid a costly mistake, or give you reassurance your financial plan is on the right track.

Choosing Your Financial Planner

As you decide on a financial advisor, you need to make sure that you are working with someone you feel comfortable with. Most financial advisors are willing to speak with you for up to an hour, getting a feel for your financial situation, and allowing you to vet them. This can be helpful as you choose someone to act as an adviser.

Beyond whether or not you feel comfortable with the advisor (remember that you are sharing your most intimate financial information), it’s also important to make sure that he or she is properly qualified. Check to make sure that he or she has the right credentials, and is registered with the right organizations. Many people look for the CFP designation, since it indicates a certain amount of rigorous training.

Also, consider checking online for reviews, or with the Better Business Bureau. If a financial planner has been problematic, that will show up, and you can consider it a red flag to stay away.

Don’t forget about fees. In many cases, if all you want is a basic plan, and some general direction for your specific situation, you can pay a flat fee, or pay an hourly rate. However, if your finances are complex enough that you want a full-on financial adviser and money manager, you’ll need to pay attention to the way that your candidate is paid. You’ll want to know whether he or she receives a percentage of assets under management, and whether some of the income is based on commission.

It also helps, when choosing someone to manage your money, if he or she has a fiduciary duty to you, meaning that your financial interests have to be put first.

What do you think? Would you use a financial advisor? What are some things to look for in a financial planner?

Photo credit: SalFalko

Published or updated February 15, 2013.
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{ 5 comments… read them below or add one }

1 Tom Strauss

Excellent advice, Miranda! Some people just aren’t wired to adequately handle all financial issues that arise. Better to get professional advice than to let pride put your financial future at risk.


2 Chris @

There are so many financial resources online now that even if you do hire a financial planner customers can be better prepared to protect themselves and their capital. It’s one thing to deal with a shady mechanic who may cost you a couple grand but bad financial planning advice could cost someone everything.


3 Snarkfinance

I think it is always best to learn the basics yourself before seeking “professional” help. Nobody can ever be a substitute long term for ignorance.


4 KC @ genxfinance

These are great tips. There are a lot of benefits in getting a financial advisor. He can he help you maximize your investment and know where it will get a higher return, save you money. But you also need to do your part. Learn the basic knowledge about managing your finances and research well for a good advisor that you can trust.


5 Roger @ The Chicago Financial Planner

Nice post Miranda. My exceedingly biased opinion is that investors should only work with a fee-only advisor, there are certainly many competent advisors who are paid via commissions or work as fee-based (a confusing term for a combination of fees and commissions) but there is always the inherent conflict of interest. Is he/she recommending this financial product because it is best for me or because it will pay the advisor a handsome commission?

While many folks may be capable of managing their own finances, at some point the advice of a competent, experienced professional can provide a detached 3rd party perspective.


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