While you can learn a lot about personal finance through books, online courses, blogs, and more, this information will not make you an expert overnight. Sometimes, you should refer to a financial adviser in order to make the best decisions when it comes to your financial future. Since hiring a financial professional involves an upfront or continual investment, it can be difficult to know when it is the right decision. A number of different options exist that can fit different budgets, ranging from robo-advisers who offer algorithm-based solutions to live advisers who can work with the subtleties of a situation to provide highly personalized advice. The following are some signs that you could benefit from one of these advisory services.
1. You are experiencing a major life change.
Major milestones in your life such as a marriage or the birth of a child are generally cause for joy and celebration. However, they can also create a lot of financial stress. If you’re in one of these situations, you may want to have a conversation with a financial adviser to ensure that all your paperwork is in order. In the event of a marriage, it often makes sense for both parties to meet jointly with a financial adviser so that everyone is on the same page in terms of how to handle money. Disagreements or mistakes on this front can lead to serious relationship problems down the line. For those who have recently had a child, financial professionals can help to set up accounts for the future and go over the various options in greater detail. Financial advisers are also important when you are thinking about retirement or encountering any other major life change, such as a promotion that involves a higher salary or a sizable inheritance.
2. Anxiety about saving for the future has mounted.
Sometimes, people have a lot of anxiety about their financial future and whether they are saving enough money to meet their goals. While online tools can help you to save, nothing alleviates anxiety quite like meeting with a professional who can either affirm that the right steps have already been taken already or help to launch a better strategy. Even people who are financially savvy may not understand all the different savings options and how they should shift their strategies over time. A great financial adviser will help you to get on the right track and keep you moving forward. Saving involves a number of financial planning areas that range from retirement and investment accounts to taxes. Financial professionals understand how to make everything work in harmony.
3. Dealing with money has become too stressful.
Many people simply do not like to deal with money, which is perfectly acceptable. These individuals may have zero desire to learn about financial advisers and would instead prefer to hand everything over to someone else. These types of people should have a financial adviser, provided that they have enough money to invest. Every financial adviser has a different cutoff when it comes to working with clients, depending on their goals and the amount of money that they already have saved. People may need to shop around to find the right financial professional for their situation. In the meantime, it may make sense to invest in index funds or another vehicle with low risk to help your wealth grow.
4. Tax planning results in a refund issued each year.
For many Americans, filing their taxes involves a lot of stress, usually due to the time investment involved. One of the main motivations that people have is the fact that they will get some money back at the end of the process. However, obtaining a refund every year often is an indication of poor tax planning. The federal and state government do not pay any interest on the tax dollars that people overpay each year, so the money that they get back would have been better invested elsewhere, even in a bank account with very low interest. Financial advisers help people to make the most of tax law and plan effectively so that they do not overpay and can use the funds in better ways. Financial advisers are also a great resource for people who simply dislike the tax process and would rather leave it in the hands of professionals.
5. A third-party opinion would be appreciated.
Many investors believe that their financial situation is not complicated enough to warrant a financial adviser. They are often the same people who feel like they could use a third-party opinion about investments since they are approaching it as amateurs. No matter how much time people spend learning about investing, they will always tend to make irrational decisions or mistakes in the market. In many cases, financial advisers are worth the expense if they can save investors from one bad decision each year.In addition, these professionals are always on the lookout for new opportunities, so they can connect investors to deals that they may have otherwise overlooked. Individuals may also want to look to financial advisers to help them to identify additional learning opportunities.