When Should I Hire A Financial Planner?

when to hire financial planner cfp

It's a common misconception that only the wealthy need a financial planner. In truth, almost anyone can benefit from professional financial guidance now and then. Find out common reasons people might need to hire a financial planner and what to look for when seeking professional money advice. 

You Don't Have The Time Or Knowledge To Manage Your Money 

While a frugal approach often means doing everything yourself, there are times when the DIY approach costs you money. If you put off making financial or investment decisions because you don't have time, or you don't understand the options, you're essentially leaving money on the table. Hiring an independent financial adviser should be a top priority for those delaying financial and investment decisions due to lack of time or knowledge. After consulting with you on your investment goals and level of risk, an independent professional can make investing and finance decisions on your behalf. They can educate you, so you're better able to make decisions moving forward. When hiring someone to manage your money indefinitely, you'll probably pay by commission. Always make sure you understand the fee structure for their services, which may be a la carte or a percentage of your assets. 

Your Financial Situation Becomes More Complicated 

For many, an unexpected complication in their finances is the reason to seek professional advice. If you recently inherited money or real estate, had children, took on freelance or consulting work, or changed careers, check in with a certified financial planner. They can review your portfolio and assets, provide unbiased advice, and get you set up with essentials, such as life insurance or investment accounts. Since you probably only need a few hours of professional advice, look for fee-only financial planners who are fiduciaries, meaning they're legally obligated to act in a client's best interest. 

You've Had A Major Life Change 

Make financial planning a priority when faced with major life changes: death of a loved one, divorce, job loss, or a significant raise. An independent financial adviser can answer your questions, address any concerns, and suggest steps to protect your financial health. For this short-term need, seek a CFP who is a fiduciary and provides fee-only services. 

You're Approaching Retirement 

Those approaching retirement should consider scheduling a consultation with a financial planner for a financial health checkup prior to leaving the workforce. A financial planner can help you plan to maximize income in retirement, catch up on retirement savings, or pass on strategies for saving more money and stretching a budget. A financial planner can also answer questions to demystify your options approaching retirement. Consider hiring a fee-only financial planner several years before a planned retirement to get on the right track, then revisiting the financial professional within a year of retirement to fine-tune your approach. For more personalized CFP service or long-term relationships, retain a financial planner who works on the commission model. 

Hire The Right Financial Planner

Knowing when to hire a financial planner will help you take action quickly to conserve your resources or grow your wealth. Understanding how to find the right professional adviser will help you get the help you need without overpaying.

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