Do I Need A Financial Advisor?

—TechRound does not recommend or endorse and financial, gambling or investment practices. All information in articles is purely informational—

Hiring a financial advisor could be hugely beneficial in helping you manage your personal wealth, especially if you have specific long term monetary goals. However, there are certain things to consider before deciding whether or not a financial advisor is the right option for you.

What Do Financial Advisors Do?

A financial advisor is someone who helps people manage their wealth and personal money matters. They can assess an individual’s financial situation and draw up specific plans for them, as well as recommending the best course of action for their investments. For this reason they are sometimes known as financial planners. Different financial advisors may have different areas of expertise meaning they can offer specific advice regarding things such as business investments, life insurance or retirement savings plans.

Generally speaking, your financial advisor will meet with you to assess and analyse your current financial situation and ask you about your long term financial goals. From this, they will help you to draw up a plan on how you can achieve your objectives, be it saving for retirement, paying the least amount of estate tax or planning for your children’s futures. You may utilise a financial advisor to get your debts, loans and finances in order, to ultimately perform better financially.

They can also be on hand to provide any specialist advice should any unexpected financial issues arise. As part of your long-term plan, they can help recommend different financial products, investments or savings accounts to help you maximise your return on investment.

Should I Get a Financial Advisor If I Have Savings?

If you have substantial savings, it may be worth hiring a financial advisor to help you decide on the best course of action. Your financial advisor can compare and contrast different options on your behalf to find the accounts with the best rates to maximise your savings. Additionally, they can offer advice and recommend different investment products so that you can start to earn money on your savings. All of this will protect your savings from sitting in a zero-interest account failing to accrue any value.

How Much Money Do I Need to Have a Financial Advisor?

Certain financial advisors will have minimum asset thresholds meaning that in order to work with them you will need to have a certain amount in assets. A typical value for this is $100,000 although for certain financial advisors, this value will be even higher; sometimes a minimum of £500,000 or £1 million.

If you have less than £100,000 in assets, it may not be worth your while to hire a financial advisor as it will cost you a lot of money for little reward.

When Might It Be Useful to Have A Financial Advisor?

Certain key life events may be a catalyst for hiring a financial advisor; namely, anything that has the potential to impact your finances in a large way.

The following situations are just a few examples of when it might be sensible to contract the services of a financial advisor:

  • If you have inherited money
  • If you are wanting to save for future retirement
  • If you are looking to manage the finances of others (for example, ageing parents)
  • If you want to get advice about investment products
  • If your marital status has changed (for example, you just got married and need to manage finances as a couple, or you are recently divorced, separated or widowed and need to manage your finances as a single person).

Generally speaking, financial advisors can help you if you want to look into savings and investments, insurance, mortgages, pensions, equity release, retirement planning, tax and estate planning, property portfolios (read more) and family finances.

Should I Hire a Financial Advisor?

If you have a certain amount of money and have various financial products to manage such as savings, investments, mortgages and planning for your retirement or for your children’s future, a financial advisor may be a good idea. This service will help you find the best strategy to plan for your future. Your financial advisor will save you the time and effort of doing large-scale comparison of the many strategies and products available. They will provide their expertise to provide you with the best options for your personal financial circumstances.

However, financial advisors come with a price. If your assets do not come to a total minimum value, you may be unable to contract the services of a financial advisor. Additionally, financial advisors can be expensive so, depending on your personal financial situation, it may not make good economic sense to use this service. In addition, financial advisors sometimes have preferential agreements with certain financial providers meaning that they may be biased in their recommendations. As a result, they may recommend more costly products, especially if they are working on commission.

—TechRound does not recommend or endorse and financial, gambling or investment practices. All information in articles is purely informational—