Are Financial Advisors Worth It? Forbes Advisor

Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors’ opinions or evaluations. Working with a financial advisor is a commitment that requires not only your time but also your money. You may be wondering if paying a financial advisor is the right choice and if it’ll be worth the investment. If you’re on the fence about teaming up with a financial advisor, it’s important to consider where your finances are now and where you want them to be in the near future. A financial advisor can walk you through complicated financial scenarios or give you investment advice. Here’s how to decide if working with one is the right choice for you. What Do Financial Advisors Do? A financial advisor is a professional that works closely with clients to determine their financial goals, as well as help them create a plan to reach their goals. These professionals can help you with various financial decisions, including creating an investment plan for retirement, saving money to buy a home, or investing in a business. Financial advisors are usually certified financial planners (CFPs). These professionals are required to go through official coursework and pass a final exam to earn their licensing and certification of the CFP title. CFPs are bound by a code of ethics and standards of conduct enforced by the CFP Board, which requires them to work under fiduciary duty and always put their clients’ best interests first. This is a crucial consideration when choosing a financial advisor that will manage your money responsibly and ethically. It’s important to note that a financial advisor is not the same as a financial planner. While financial planners offer similar services and advice, advisors usually work on a short-term basis and provide advice on specific financial investments and products. Conversely, financial planners typically work with clients on a long-term basis and take the approach of improving your entire financial life, not just specific aspects of it. Financial planners also generally earn commission on products they sell, which means they may not always work under a fiduciary standard of care. Be sure to understand if the financial professional you want to work with is an advisor or planner before hiring their services. Related: Find A Financial Advisor In 3 Minutes Do I Need A Financial Advisor? Just about anyone can benefit from working with a financial advisor. The people who benefit the most are typically people who aren’t comfortable making financial decisions on their own or need help navigating a specific investment decision. If you’re going through a major life event, you may be better suited to work with a financial planner. Major life events can include purchasing a home, nearing retirement, managing credit card debt, paying off student loans, saving for college or something as simple as creating a budget. Are Financial Advisors Worth It? If you’re having a hard time making financial decisions on your own or aren’t sure where to start with your economic journey, working with a financial advisor may be worth the time and money. However, if you’re already on a solid financial path, you might not benefit much from teaming up with a financial advisor. For example, if you already follow a retirement plan or don’t have a significant amount of debt to pay off, then you may not need expert advice. If you decide to work with a financial advisor, it’s important to find one that aligns with your money principles and philosophy. For example, if you strive to be an ethical investor, you’ll want to choose an advisor who has knowledge of investing and will be able to tailor your portfolio to these specific needs. You should also work with a financial advisor who won’t push you to work toward your financial goals faster than you’re comfortable with. Ultimately, whether or not a financial advisor will be worth your money depends on your specific situation and the financial advisor you choose to team up with. If they align with your goals, listen to your needs and act in your best interests, they will most likely be a good financial investment. Related: Find A Financial Advisor In 3 Minutes How to Find a Financial Advisor There are many financial advisors out there, which can make the process of finding one to work with overwhelming. But don’t worry—it is possible to find a suitable financial advisor. Many professional financial planning associations offer free databases to make it easier to find a financial advisor, including: If you’re concerned about the cost of teaming up with a financial advisor, you can opt to work with a robo-advisor. These self-operating software platforms automate investing and manage your portfolio for you based on your goals. Some also allow customers to add personalized financial planning from a real financial professional for an additional cost. Robo-advisors are great tools to help you manage other aspects of your financial picture, too, with several offering more traditional banking services like cash management accounts and savings accounts. Looking For A Financial Advisor? Get In Touch With A Pre-screened Financial Advisor In 3 Minutes Looking For A Financial Advisor? Get In Touch With A Pre-screened Financial Advisor In 3 Minutes

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