There’s a wide variety of advice out there as to whether or not you should get yourself a financial advisor. The short answer is no, most people don’t NEED a financial advisor. However, if you don’t get one, you might be missing out.

So in this post, I’ll share my own personal experience with a financial advisor and what is generally recommended to help you decide if you should go find one. If you decide to get in touch with one, how do you make a good choice?

My Consult with a Financial Advisor

For background: my husband and I manage our money separately for the most part. We schedule regular money date nights to reconnect on what goals we have met, what goals we have set, and just to touch base on how we could approach matters going forward.

In 2016, a friend suggested we see a financial advisor because we had too many accounts. If he could see us now! 🙂 At the time, it made sense. And it did feel like a lot so we agreed. I honestly don’t remember how much we paid but it was hefty and the person my friend recommended was pretty far. Prior to our visit, we completed some worksheets about our assets (bank accounts, investment accounts, etc.) and liabilities (debts) which allowed us to take our time to examine everything. We also put down information regarding our life insurance policies.

The appointment was going fine as he presented his ideas on how we should move forward. While I don’t remember most of the details now, what stuck with me was that he wanted us to pay off a 0% debt. We had financed a new washer and dryer that we bought from Best Buy. As long as we paid the total amount within 12 months, we would pay nothing extra in interest. I had already done the math and knew how much needed to be paid in order to reach this goal. However, he was insistent we pay it off immediately.

I was hesitant to pay it off because, at the time, we had much less stashed away in case of an emergency. My concern was that, while we could afford to pay it off immediately, that would be even less money stored in our savings accounts in the event that something happened and we needed it. But he put pen to paper and made that a part of our official plan. I knew then, I would never go back. It didn’t sit well with me that he felt so strongly about his plan for MY life that he would go against my wishes.

Why You Might Want a Financial Advisor?

Do you find it difficult to make sense of your financial plan? Are you looking for ideas on how to optimize your financial future? Have you had a significant change recently that changes your financial outlook? That could be a new job, a pregnancy, a sick family member, etc. Those are all possibilities for your original plans to get more complicated than you intended. If you feel like making these changes yourself may be too complicated or you want a professional’s opinion about the choices you plan on making, then you might consider reaching out to a financial advisor or planner.

Our visit to the financial advisor wasn’t all bad. For one, we paid one price for the entire year. So if we did wind up following up with him, there wouldn’t be any added cost for his advice. Additionally, our household income was too high to contribute to a Roth directly so he introduced us to the backdoor Roth. That’s a strategy we can replicate whenever we surpass the income limits for the Roth IRA.

I have learned so much about personal finance in the last few years (see my Money Journey) that I find it unnecessary to pay someone for advice. I continue to listen to podcasts and read articles for tips on how to optimize my finances. There’s a lot of information out there, some of which apply to my situation while others don’t. So I choose to take the time to put in that work. While I doubt I would seek the assistance of a financial advisor any time soon, I am not against the idea. I have learned so much about how to choose a good one. On that note…

READ MORE: My Money Journey

Choosing a Financial Advisor That Works For You

There are a few key things to look for from my perspective.

1. Your advisor listens to you, your concerns, and your ideas on your financial plan. They should be working WITH you to create a plan you are comfortable with.
2. You know how your advisor is getting paid. Basically, how much do they cost? Are they getting paid per hour, per session, per year, or do they get a commission selling you financial products? If they are being crafty about explaining their pay structure to you, you just might want to look elsewhere. You want to be able to trust them. To note: a fiduciary financial advisor is obligated to put your interests above their own.
3. The advisor is familiar with the situation you are looking to address. Some advisors might have loads more experience in optimizing your taxes, while others may excel in helping you plan to care for an aging parent. Whatever motive prompted you to look for the help of a financial advisor should direct you to the right person for the job.

I listened to a great podcast by Jean Chatsky this week on this very subject. For more details on how to vet and choose a financial advisor or planner, click here.

Find an Advisor Near You

A lot of banks and financial service companies have financial advisors conveniently available. This is a great option for some. Others may be wary about the potential motives of an advisor employed by these institutions as they may be enticed to sell services you were not looking for. Again, it is up to you to ask questions prior to getting into a relationship with any financial advisor.

In the podcast episode I referenced earlier, Jean interviewed Pam Krueger. Pam created a service called Wealthramp that matches you with a vetted, independent fiduciary advisor for free. This could be a great resource for those who want an advisor that can meet their needs but don’t want to go through the trouble of interviewing a bunch of financial advisors.

I hope reading this has helped you to better understand the role of a financial advisor and how you can find a good one if you’re interested in working with one. At the end of my consult, I did not decrease the number of bank accounts we had. In fact, I have more now than ever before.

READ MORE: How Many Bank Accounts Could You Possible Need?

Your turn. Have you ever consulted with a financial advisor? If so, what are some pros or cons you have experienced? If not, what has kept you from consulting with one? Share in the comments below.

Share on Facebook

Tweet