Is a Financial Advisor Worth It?

If you’ve spent any time searching for financial advice online, you’ve probably heard the following countless times — Get a financial advisor! — but if you’re like most people, though, it’s likely that you’re at least somewhat skeptical. 

You may wonder whether a financial advisor can really make that much of a difference, especially if you’re already financially literate, but the fact of the matter is that, in most cases, hiring a financial advisor often provides a significant return on investment (ROI).

5 Reasons a Financial Advisor Is Worth It

Here are five reasons why hiring a financial advisor is an undeniably smart move:

1. They Can Help You Navigate Life Events

Sometimes, you might find yourself managing your money well, only for a major life event to occur and completely upend your financial landscape. Oftentimes, people seek out the advice of a financial advisor if they find themselves in any of the following scenarios:

  • The birth of a child
  • A sudden windfall (like inheritance or lottery money)
  • Marriage
  • Divorce
  • Nearing/entering retirement

In many cases, even people with a fair bit of financial knowledge opt to seek the advice of a financial advisor, as major life events can be emotionally difficult and make second opinions helpful.

2. Some Are Obligated to Work in Your Best Interest

Some people are hesitant to hire financial advisors because it’s believed they may have ulterior motives. If that is a concern of yours, you may be interested in hiring a fiduciary advisor, as fiduciaries are legally required to always act in your best interests. 

Of course, there are plenty of ethical, non-fiduciary advisors who will still work toward your best interests, but the key difference between the two is that they are not legally obligated to.

3. Their Fees Are Less than You Think

If you don’t have a whole lot of money to spare, you may think that hiring a financial advisor isn’t a financially wise move, but the fees you pay usually are, in fact, not particularly high. Different advisors have different fee structures, and some charge more than others, but if you’re looking for one-time advice to get you on the right path, you may be able to pay a flat hourly fee. 

If you’re looking to strike up a long-term relationship with an advisor, you may pay either a small percentage of your total managed assets or a flat management fee, and if you’re primarily purchasing investments, some advisors work solely on commission.

4. They Have Unparalleled Insight into the Financial World

Compared to ordinary people who are exceptionally financially literate, financial advisors have an edge: They’re immersed in finance day in and day out, meaning their hands-on experience working with individual clients may help them make better decisions for you.

Even further, financial advisors have more than just intuition on their side. They often have powerful tools for industry analysis that let them track and predict trends, and with those sorts of insights, they can recommend the right investments at the right time.

It’s even better if you also have existing knowledge about the financial world, as you and your advisor can discuss ideas and effectively collaborate to form a great plan. As is the case with many different things, two heads are better than one!

5. They Can Help You Strategize

You probably won’t have any trouble setting financial goals, but when it comes to achieving them, it can be a challenge. Financial advisors have helped clients from all walks of life work towards all types of financial goals, so they can help you develop a sound plan to reach them.

Most financial experts recommend setting SMART goals: That is, goals that are Specific, Measurable, Achievable, Realistic, and Time-based. An experienced financial advisor can help you take a general goal (“get better with money,” for instance) and work it into a SMART goal, like paying off all your credit card debt in five years, opening a high-yield savings account, or developing a diverse investment portfolio.

Ready to Hire a Financial Advisor?

Whether you already have a decent working knowledge of finance or are just developing your financial literacy, Good Life can help! Our experienced advisors have helped clients from all walks of life achieve their financial goals.

If you think you may want to work with us, contact us to schedule a free consultation. We can get to know you while you get to know us, and you can decide whether you feel as though we’re a good fit to begin developing a financial strategy for you. We look forward to speaking with you!

The opinions voiced here are for general information only and are not intended to provide specific advice or recommendations for any individual. All Investing includes risks, including fluctuating prices and loss of principal.