If you are serious about creating a financial plan—not just through investments, but also through savings and debt management—looking for a financial advisor may be a good idea.
The term “financial advisor” is quite broad and describes a few different types of services. A few reasons why you may need a financial advisor are:
- Planning for retirement. Part of a financial advisor’s role is to help you meet your long-term plans, which includes planning for retirement and making an estate.
- Creating a savings plan. Savings means more than just putting a certain amount of money away every month. There are different savings strategies and options that financial planners can help teach you.
- Budgeting for large purchases. When purchasing a home or another large item, it’s important to understand how the purchase will affect your finances, as well as how much debt you should be taking on to make the purchase worthwhile.
- Navigating complex investments. Many financial planners specialize in managing investments that are tailored to your income, long-term plans and risk tolerance.
When choosing a financial consultant or advisor, you’ll want to consider your needs and your budget.
If you are just looking to invest a few hundreds or even a couple of thousand dollars on some safe index funds, then hiring a financial advisor may not make sense. On the other hand, if you’re interested in investing larger sums of money and creating a comprehensive financial plan for yourself or your family, then seeking professional guidance is key.
When choosing an advisor, you will want to compare advisors by looking at their fee structure, offered services, certification, etc. You can find all of this information in the investment advisor’s Form ADV.