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Many people think that only people who are really well off need a financial advisor. This typically shows a common lack of understanding about what a financial advisor is and what they do. Understanding when you need a financial advisor can help you have a better retirement, purchase a home sooner, and otherwise improve your financial wellness.

What Does a Financial Advisor Actually Do?

A financial advisor is, in plain terms, a professional you hire to give you financial advice. A tax advisor is a kind of limited financial advisor. A financial advisor will learn about you and your goals and then work with you to help you reach them. They may help you with your investing or they may take over the entire task of investment management for you, depending on whether you enjoy investing or not.

Make sure to choose a fiduciary financial advisor who works for you, rather than letting somebody talk you into one that works for an investment company. The latter generally does not have your best interests at heart. Fiduciary financial advisors typically operate on a fee-based system and do not get commissions.

So, what are the signs that you need a financial advisor?

Your Finances Are Taking Up More and More of Your Time

Spending hours poring over money might not be the best use of your time. True, some people enjoy this, but these are often the kind of people who seek jobs in finance.

If handling money is taking you away from things you would rather be doing, then it might be time to look for a financial advisor.

You Experienced a Life Event That Made Your Finances More Complicated

Some life events may make your financial situation much better, much worse, or simply more complicated. Here are some that might make it worth looking for an advisor:

  • You inherited some money and are not sure what to do with it.
  • You just got married or divorced.
  • You are in a domestic partnership and wholly or partially combining finances.
  • You have taken on financial power of attorney for an elderly relative and are struggling to handle both sets of finances.
  • You have welcomed a child through birth or adoption.

You Are Stressed About Money

Maybe you are afraid you won’t be able to afford to retire. Or it seems that everything is going up except your income. Or, perhaps, you just hate financial planning that much. You dread it, you put it off, and then nothing happens.

Getting a financial advisor can reduce your stress and improve your mental health. Also, people who are stressed tend not to make good decisions.

You Are Saving 20% Or More of Your Income in a Given Year

Some experts give this as the threshold at which it is worth getting an advisor. The overall point is that if you are doing well with savings, you may find it worth seeking help to do even better. This may of course depend on your income; if you are a higher earner you may want to consider one sooner.

Many financial advisors require a certain minimum deposit to get started, so this might also be a guideline for how much “extra” money you should have before you hire one.

You Tend To Get Emotional About Investments

Another reason to get help is if you find yourself investing based on sentiment, not returns. In this case, it’s often best to hand things off to a professional. Putting a few dollars here and there in a startup with a goal you believe in is not, of course, terrible, but losing your shirt chasing blue-sky technology might be.

If you think it might be time to hire a financial advisor, contact Roberts Tax and Retirement Planning. We offer high-quality fiduciary tax and investment planning to support your future.