Everyone Needs a Financial Planner, When Should I Pay for One?

To preface, I am a CERTIFIED FINANCIAL PLANNER™ Professional, but I am writing this in hopes of clearing up a question that I find a lot of folks struggle with: when or why would I need a financial planner?

In my opinion, everyone needs a resource when it comes to financial planning. Notice, I use the phrase “resource”, and recognize that you probably have one whether you realize it or not. That said, I believe the term “financial planner” comes with a bit of mystery. Many folks believe a financial planner solely helps them pick investments and manage their portfolio over time. Although investments are a big portion of financial planning, there is so much more to what a true financial planner can help you with.

As we will discuss, a financial planner may come in different forms and can address one key area, or many, depending on the level of engagement that is best suited for you at the time. A truly effective financial planner should help avoid costly mistakes, provide confidence, and allow you time to focus on what is most important to you. Depending on one’s phase in life, not everyone may need a designated financial planner as this resource, rather this individual might be a family member or friend – just be sure it is someone qualified, not just someone with a 2001 purchase of Apple stock as the only experience on their resume.

In the early stages of your saving career when there may not be much complexity, a trusted resource in combination with online materials may be plenty to get you heading in the right direction. Ideally, I would suggest it is best you do have a professional to reach out to but do not always suggest the need to pay for professional advice at this stage. If you find someone you trust, the “financial planner” role can simply be a sounding board. This may seem simple but there are all kinds of small adjustments that typically are missed and, when compounded, can have a significant impact in the future.

Towards the middle stages of life, as things become more complex (maybe a significant other is now in the picture, you have children, a home purchase on the horizon) and your savings gets to a point where risk management becomes important, this may be the first level where having your family’s own financial planner is helpful. This can start as simply having someone available to you on an as-needed basis, or it may be a financial planner you hire as a consultant on an ongoing basis or every few years to help keep to your plan and update as the winds of life shift.

If you are in the pre-retirement or early retirement stages and have accumulated significant assets that you and your family depend on, hiring a financial planner for proactive and ongoing advice becomes essential. Right now, there are so many investment advisors providing tabletop advice and free online resources/retirement plan analysis. This paired with a long-term uptrend in the market has led many to a newfound self-confidence in their investment choices. At this phase, mistakes can be detrimental and working with a CERTIFIED FINANCIAL PLANNER™ Professional in your corner can help to avoid such costly errors. It is critical to have someone on your side to consult with not only on your investment choices but tax strategies, distribution planning, and risk management as well. Whether you are paying a financial planner a consulting fee or an asset management fee, the planner should be helping to develop and adjust your financial plan, addressing all these areas, over time. A trusted financial planner should also allow you the confidence and time back in your life to enjoy what is most important to you.

As you read this you may be sizing yourself up to see where you fit. Please keep in mind everyone is individual and these broad categories may not reflect your scenario specifically, but this is meant to give a framework as a starting point. When in doubt, reach out to a financial planner you feel you can trust to determine how or if they may be able to help you.

If you have questions about this article, or if we can be of service, be sure to get in touch with us!