Do I need a financial advisor?

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A financial advisor can help everyone

People typically believe that financial advisors only help individuals and families with immense wealth, but this is not true. Financial advisors usually work with middle-class families who need help with retirement planning, saving for their children’s college, buying a home, and taking care of other major financial goals.

Helping with emotional decision-making

One of the main things financial advisors do is eliminate a lot of the emotional decision-making for clients. When it comes to a risky investment strategy, people tend to react emotionally to changes in the stock market. If you have a financial advisor assisting you with your investment decisions, they can help you steer away from the emotional side of your money so you can put the best long-term plan in place for your finances.

Robo-advisors

The rise of daily financial planning apps and websites, often referred to as robo-advisors, makes it easy to manage daily financial management decisions without the help of a financial advisor. Many of these apps and websites offer services similar to those of a financial advisor at a fraction of the cost. If you are confident in your money management skills and investment choices, you may not need to pay for a financial advisor thanks to these planning tools.

Major life changes

While robo-advisors can certainly be useful, sometimes they may not be as helpful as a real financial advisor. Some situations are too personal for an algorithm to place you in the best position. For example, if you want to understand how to deal with the tax implications of an inherited retirement account, or if a family member suddenly leaves you a large sum of money, these are situations where you need someone who can understand all aspects of your situation to help you make decisions.

Feeling comfortable with your financial situation

If you feel confident but would like to have an advisor review your situation, it is quite possible to get this help by paying a one-time fee for a financial advisor once a year. You can manage your accounts on your own the rest of the time. However, if you hate dealing with money, or don’t understand anything about executing an effective investment strategy, or receive a large sum of money and are unsure what to do with it, then a financial advisor is the right choice for you.

Conclusion

When deciding whether to hire a financial advisor, look at your financial situation and ask yourself if you know what you’re doing. If you feel you have a good understanding of your daily financial needs, that’s great – you may not need to spend money on an advisor. However, if you feel stressed about your finances or believe you’re not making the best possible decisions, hiring a financial advisor will likely be a wise and profitable financial step.

Source: https://www.thebalancemoney.com/do-i-need-a-financial-advisor-453656