Written by: Jamie Malone
As a kid, I remember crawling underneath our vehicles and helping my dad change the oil, replace brakes, and do other auto repairs. Sure, I picked up a few things, but I decided years ago that I am happy to have a mechanic take care of our cars! When was the last time you decided to hire someone to help you (e.g., lawn care, tax preparation, home projects, etc.)? Why did you seek help instead of doing it yourself?
Do you need help with your finances?
When it comes to financial planning and investments, you may have asked yourself a similar question: Do I need help with my finances? The answer to this question is different for each person.
In a Forbes article, Why You Don’t Need a Financial Advisor, the author shares situations where a financial planner may not be needed: You love investments, you’re running on autopilot, most of your income is from pensions, or you just need tax help. These could be reasons to do it yourself. But, if you don’t have a clear plan for your financial future, it’s worth considering the following questions to see if working with a financial planner is right for you.
Are you an expert?
Growing up, I quickly realized that I was not an auto mechanic. I could hand my dad tools and assist him, but I do not have the training, own the right tools or have the desire to do my own repairs.
You are responsible for your own financial future. Your comprehensive financial plan should consider retirement, investments, estate and tax planning, risk management and possibly other areas such as education planning, charitable gifting, etc. If these areas are not your forte and you don’t plan to become a finance pro, find an expert. As my colleague, Marilee Falco, CFP®, ChFC, explains in her blog, “One important step in improving your financial literacy is by working with a financial advisor, specifically a Certified Financial Planner™ professional.”
Is this how you want to spend your time?
As a boy, I was lucky if my dad and I finished working on the car by lunch on Saturday! Sometimes things just take longer (much longer) than expected. Is it hard for you to find the time to build a comprehensive financial plan? If so, you may benefit from a professional guiding you through the planning process.
Often, clients seek our services so they can spend their time doing the things they love. Time is a limited and precious resource. In fact, some of our clients are financial professionals themselves. They could certainly manage their own finances; instead, they hired us because they choose to spend their time doing things that are more important to them. Plus, they appreciate personalized advice from a fiduciary advisor.
Is your financial situation complex?
Do your finances feels like a LEGO set without instructions? Are you having a hard time wrapping your arms around all your financial accounts? Has your compensation package, tax situation or other area become more complicated than you are comfortable handling? If so, you would likely benefit from working with a financial advisor.
How do you find an advisor?
After taking inventory of your finances, you may conclude that working with an advisor is right for you. How to find YOUR financial advisor is a great resource by The National Association of Personal Financial Advisors (NAPFA). NAPFA is “the country’s leading professional association of Fee-Only financial advisors–highly trained professionals who are committed to working in the best interest of those they serve.” This resource outlines 5 steps, which I have listed below, followed by my comments:
- Have the conversation – Why are you considering working with an advisor? What type of services do you need? Different advisors have different service models. For example, many focus on long-term client relationships but some provide hourly or project planning.
- Select several advisors – NAPFA’s Find an Advisor is a good place to start. If you are looking for an hourly, Fee-Only advisor, try the Garrett Planning Network.
- Do your homework – Check out the advisor’s website, the SEC’s Investment Adviser Search, and FINRA’s Broker Check.
- Meet them – This step is important. NAPFA’s resource has 10 questions you should ask each advisor you meet. These questions include: How are you compensated? Are you held to a fiduciary standard at all times? Have you ever been disciplined by the SEC or FINRA?
- Review – Based on your financial goals, determine who is the best fit for you.