You might be surprised to learn just why you need a financial advisor. Personal finance isn’t something you can easily do yourself, especially these days. Financial advisors used to be only useful (and affordable) for the very wealthy. After all, if you only have a little bit of money, why get an expert to help you with it?
But in the past few decades our financial system has evolved, with more pitfalls, complexities and confusion surrounding how to protect and maximize your money. Navigating through the modern landscape of investments, accounts and contracts isn’t for the faint of heart.
Don’t believe us? Here are five reasons you actually need a financial advisor.
1. Everyone’s Situation Is Different.
If you’re trying to answer financial questions by looking online or in books, you might become frustrated. Every article is loaded with caveats. Which fund is best for saving for college? Well, it depends. What should I do with a $10,000 inheritance? Well, it depends. How much should I save for retirement? You guessed right: It depends. There are general rules, but if you actually want to get a straight and confident answer, you need to have a conversation with a financial professional.
A financial advisor will look at all the details of your life, from your net worth, your income, your debt, your hopes, your dreams, your fears, your strong points, and your bad habits, to come up with the right recommendations for you. That might include everything from which credit card to sign up for, to a strategy for paying down your debt, to an investment strategy that is right for your life stage and even your personality.
2. Free Services Compliment a Financial Advisor
Well, what about all those cool and free online tools, like Mint.com, that help you budget? Or free debt counselors? There’s no denying that they are useful. But they are just one tool in your arsenal of managing your finances.
For example, let’s say you use Mint, and you find out that you’ve been consistently overspending by a few hundred a month. A financial advisor can help you devise strategies and a plan for tackling that problem. While Mint lets you create a goal and tracks how much you are putting to that goal each month, a financial advisor will tell you how big that goal should be, and how much you can afford to save each month. Mint will tell you that your investments are growing or declining, but now how to invest.
Debt counselors, as essential as they are for some people patching up their financial situation, will help you remedy past mistakes and coach you in the present. That’s where their service ends, however. A financial advisor will help you look forward, by helping you save up for a home, put money toward retirement, and plan for emergencies.
In summary, while free services can give you a picture of where you are, a financial advisor will tell you where to go and how to get there.
3. Financial Advisors are a Guardian Angel for Your Money
As your financial situation improves, you’ll increasingly become a target of companies and people—both legal and illegal — that want to make money off of you. Having a financial professional to turn to, instead of family and friends, who don’t know much more than you do — is invaluable.
You’ll be offered the chance to invest in an annuity, transfer the balance on your credit cards to a new one, and get life insurance, among many other complex financial products. An unbiased financial advisor can look at that service being offered, and tell you whether it is actually a good idea for you and your situation, or if it’s just going to cost you money.
4. Financial Advisors are Trained, Educated, and Certified
Your Uncle Richard, coworker, and that popular blogger all have an opinion on how to take care of your money. But as well intentioned as they are, they might not have the right training and education to give the excellent advice that you deserve. A good financial advisor will be certified by several governing bodies, after graduating with at least a bachelor’s degree and passing a series of tests designed to test their knowledge of finance. So you can be confident that they’re giving you the most current and solid advice.
5. Financial Advisors are Actually Affordable
You might have heard that financial advisors will only work with the rich. But if you look for one through GuideVine, you find an advisor that will charge you based on what you can afford, whether it’s a percentage of your assets, or a flat fee per month, or fee per meeting.
The idea is that your financial advisor will do such a good job helping you manage and grow your money, you’ll earn back that fee, making it very much worth your while. So what are you waiting for? If you’re looking for unbiased, informed answers to your money questions, or even someone to tell you the right questions to ask, a financial advisor will give you the confidence to reach your goals.
Read Our Complete Guide to Finding a Financial Advisor