7 Signs You Need a Financial Advisor

Hiring an advisor is a major decision that one can make as it primarily concerns the management of one’s finances. A long-term engagement with a financial advisor or investment advisor may not be required for everyone. However, many individuals who can benefit from working with a financial advisor either do not seek professional assistance or believe they do not require it. If you have a large corpus to manage or are new to the investment world, it may be wise to seek professional help. Working with a professional financial advisor could help you manage your finances more effectively and avoid costly financial blunders in the long run. But, how do you know if you need a financial advisor or not for your specific financial needs and goals? Read further to find out.

7 signs that indicate you might need a financial advisor

It takes expertise and effort to effectively manage money and make appropriate financial decisions. Further, it takes time to examine financial investments, weigh options, and implement decisions.

Read below to know a few signs to look out for that suggest you may need to engage with an advisor:

1. You lack time to manage your finances

Something as simple as a lack of time can keep you from reaching your financial goals. As an individual or professional with extensive work hours, you may either lack the expertise or find it extremely difficult to manage your time and money. Now, this may be the foremost sign that you need the assistance of a financial advisor.

As the market remains flooded with a plethora of investment options, you may need the guidance of an expert who can help you analyze your risk tolerance and build a portfolio as per your needs. These experienced and professional advisors will devote their time and skills to your financial goals and help you better manage your money.

2. You’re close to retirement

Ideally, individuals should plan for retirement early on so that the investments get enough time in the market to use the power of compounding. But, in many instances, individuals do not consider saving for retirement until it’s too late. The returns in such cases are much lower than if the person(s) had started out early. It’s just as vital to plan for the future as it is to live comfortably in the present. Furthermore, it becomes increasingly difficult to determine whether one has sufficient funds set aside for the future as time passes. One needs to take into account inflation, the rising cost of healthcare, and factors that are beyond your control when it comes to retirement planning. 

A financial advisor may be able to help you save for retirement and build a substantial retirement corpus. Though late, an advisor may still be able to plan and execute some strategies to safeguard upcoming retirement years.

3. You’ve just started investing

If you just began investing your money, you may feel lost and perplexed. It is natural for individuals to feel confused when there are so many investment options available to choose from such as real estate, stocks, mutual funds, annuities, ETFs, and more. You may find it difficult to assess the risk profile and tax implications of all these instruments. If this is the case, you may need to hire a financial advisor. A good financial advisor can assess your risk appetite and help you invest appropriately based on your lifestyle, aspirations, and goals.

4. You’ve aren’t too confident in managing your money on your own

There’s a lot to consider when it comes to your financial situation. You may have just started earning or you may struggle with controlling your expenditures, have dependents, or may suffer from health problems. Whatever the situation, money management calls for careful handling, and sometimes, one wrong decision may spiral you down a rabbit hole. In such scenarios, a qualified financial advisor may come to your rescue. On the other hand, it’s difficult to know where you stand financially if your accounts are spread across different instruments and institutions. This is another scenario when hiring a financial advisor rather than handling it yourself is probably a better idea. For example, an advisor could assist you in moving old 401(k)s, IRAs, and brokerage accounts into a single location or consolidate them to as few as possible.Most individuals frequently require assistance with strategies, remaining on track with financial objectives, or adjusting plans as circumstances change. A financial advisor for such individuals is a good call.


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5. You’ve just got married or are filing for divorce

Marriages and divorce can get very messy from a financial standpoint.

It’s a lot different to be in charge of two lives than it is to be in charge of one. There are some difficult questions to consider – What happens to the debts of individuals? Should you merge your accounts? What is the most efficient way to submit taxes? The list goes on.

When it comes to a divorce you need to consider several things such as splitting of assets, alimony, and prenups. This may seriously dent your finances. If there is any such situation at hand, you may need a financial expert to assist you in determining the best options for all parties involved.

6. You’ve set a financial target for yourself and need assistance in fulfilling that goal

All individuals have a certain set of objectives, and any significant investment, withdrawal or expenditure made will have a huge impact on their financial situation and lifestyle.  Large investments require due diligence to ensure that you’re making the right decisions. Hiring a financial advisor here can be beneficial for you.

7. You’ve received a sizable inheritance

Managing an inheritance can be a very complicated process, especially if the inheritance is a large corpus, real estate, or a family house. In this scenario, you may have to face considerable financial complexities. Moreover, you may have to deal with inheritance taxes and other legal issues. In such instances, you may need the assistance of a qualified financial advisor. While you may try to manage everything by yourself, remember that the idea is to make the money work for you. It shouldn’t deplete through lavish spending or wrong investment decisions; rather, it must compound over time to keep you and your kin wealthy for the long term.

Your newfound fortune may also attract family feuds and business troubles. An experienced advisor will be able to best guide you through such unconventional situations.

To summarize

There are numerous reasons why individuals hire money managers or financial advisors. They may not be able to dedicate enough time to manage or monitor their investments. Alternatively, a retiree may be constantly concerned about overspending or running out of money. Any such instance calls for professional assistance. Working with a financial advisor can be worthwhile as they can plan your finances, manage contingencies, and prepare you for retirement. Also, they can help you navigate through debt and any inheritance you may have received. So, analyze your needs and assess if you need the help of a professional to navigate your finances.

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