I have been asked this many times over the course of my career. And especially now with the personal finance community popping up on social media making a lot of noise on whether having a financial advisor is necessary or not. Are they really worth the fee? Do I really NEED a financial advisor?
My answer is, it depends.
Over the past 50 years, the stock market has become incredibly efficient, accessible and more easily navigated for the individual investor despite their background knowledge of the stock market.
There are big brokerage firms like Fidelity, Vanguard, Merrill Edge and Charles Schwab (to name a few) where you can actively manage (buy and sell) your own investments if you wish.
There are also Robo-Advisors, like Betterment, Wealthfront, Ellevest and Vanguard Digital Advisor that create an automated investment strategy for you based on your time horizon, risk tolerance and long term goals.
By a couple of clicks on our computer or taps in a few apps – we could have successfully created an account, transferred money and purchased an investment within thirty minutes. Incredible, right?
We have access to not only the ability to invest on our own but also the means in which to educate ourselves on investing – how to invest, what to invest in and where to invest. The information is out there and available for us all to learn and become more educated in the financial space.
So, with all of that being said, if it’s so “easy” and all the information is out there for you, then do you really need a financial advisor?
For some, you may not need a financial advisor today or ever.
For others, you absolutely need an advisor with a great team to support you and your family’s needs.
Let ‘s take this a little deeper.
The answer is tied up in where someone is in their life. How much income, wealth, responsibility, debt, complexity etc. does one have. There is not one specific dollar amount or type of person that indicates a need for a financial advisor.
The question can be answered when understanding where you are in life, what responsibilities you have, how much time do you have to spend and will a Financial Advisor provide value in areas you either don’t know about or don’t care to partake in.
**If you have most of your assets in your 401K and have a small amount of savings to invest on the side and little to no responsibility…then, in my opinion, you are not in need of a financial advisor. You are able to go to any brokerage house or Robo-Advisor to get invested for a minimal fee. If you have specific questions about budgeting, debt payoff, your investment options for your future, etc. – then seek out a professional financial coach or resource for you to learn from that will be a one time fee to get you started or as needed, as opposed to a continual fee based off of a percentage of your assets.**
But for those of you who fall into any of the below categories – I would highly suggest looking into a Financial Advisor to help you navigate your finances and manage your assets.
If any of the below life altering events happen in your life and you have found yourself in a position where your wealth is increasing substantially and you now have the responsibility to manage wealth that you have not had to before, please consider discussing with a financial advisor.
Many Financial Advisors are more than just stock pickers. They advise you in all areas of your financial life.
Absolutely. Not everyone needs a financial advisor. But the good ones…they are absolutely worth it!
Part 2 and 3 of the Financial Advisor series coming in the next two blog posts to discuss what you should look for in a financial advisor and the right questions to ask them!!
Stayed tuned for weekly blog posts every Tuesday and Thursday!
Follow @finpoweredfemale for personal finance, tax, investing and business ownership tipcs on building wealth with confidence!