Should You Hire a Financial Advisor in Your 20s? Here’s What Experts Say

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To hire or not to hire a financial advisor–that is the question that many Americans in their 20s ponder. While there are a variety of reasons to do so, experts agree that it also depends on personal circumstances, life events and income.

Indeed, people in that age group are just entering the workforce, while also taking on a slew of financial responsibilities, such as housing, and now, the resumption of student loan payments. But while some young adults may be able to navigate even the most complex financial intricacies, others might need guidance.

“If you think you might need one, that is a sign that it is a good time to look into a financial advisor,” said Bobbi Rebell, CFP,  founder of Financial Wellness Strategies and author of Launching Financial Grownups: Live Your Richest Life by Helping Your (Almost) Adult Kids Be Everyday Money Smart. “Listen to your gut. The truth is most of us are not financial experts and the smart money decisions you make early in your adult life can have life-changing and very positive impacts on your financial future. Compound interest can be magical so by making strategic investments earlier, you have a much better shot at getting where you want to be later in life. The stakes are high and so why not give yourself every advantage.”

Here is what experts had to say about whether you should hire a financial advisor in your 20s.

Hire one when you have your first pivotal life change as an adult.

This criterion can vary person by person and can include starting a family, buying a house, taking a loan, or a multitude of other changes. Yet, according to Jessica C. McDonald, CFP, and founding advisor of Southern Wealth Builders, when you encounter such a moment,  this is the best time to hire a financial advisor. 

“From landing a job in your career field once you graduate, or getting married and needing to manage combining expenses – something that feels like a big moment is worth talking to a professional about,” said McDonald.

She added that a great way to hire a financial advisor if you are young, is to look for fee-only advisors who can be hired on an hourly or project basis.

“Someone who can offer advice for your unique situation, can guide you through and help you clearly define what financial goals you have and want to achieve in your future,” she said.

The decision should not be based on age.

According to Cody Garrett, CFP, owner and financial planner at Measure Twice Financial, whether you should hire a financial advisor or not should not be based on your age but on which financial decisions you need help considering.

In turn, Garrett said you might want to search for a financial ‘planner’ rather than a financial ‘advisor,’ meaning they will provide personalized financial advice beyond investment selection.

“Typical financial planning decisions in your 20s may include renting vs. buying, selecting employee benefits, establishing an effective cash flow system, negotiating your salary and career trajectory, determining a debt repayment strategy, right-sizing your insurance coverage and deductibles, and developing a long-term investment strategy – with or without ongoing investment management,” said Garrett.

Hiring a financial advisor in your 20s can be like having a personal trainer for your finances.

Indeed, as Jeff Rose, CFP and founder of Good Financial Cents, explained, hiring a financial advisor is akin to hiring a personal trainer as it will help you build solid money habits such as saving, investing and budgeting right from the start.

“It’s especially handy when you’re facing big life changes like starting a new job or navigating student loans, as they can guide you through these complex decisions,” he noted.

Rose added, however, that if your financial situation is pretty straightforward, you might be just fine using online resources or financial apps to manage your money and learn the basics.

It’s never too early.

Many young people think they only need a financial advisor when they have made a lot of money or have multiple assets, however, it is never too early to start securing your financial future, some experts argued.

“Twenty-somethings often don’t know what their future plans look like, and financial missteps in this decade can cause major issues in their future if they’re not careful,” said Lauren Sparks, CEO of Agility Bank.

For instance, if you decide to launch a business one day and go to a bank for a business loan, lenders usually look at your personal credit score and repayment history when deciding if you’re a viable candidate, said Sparks.

“Those who start their financial journey early are more likely to have an easier path to success,” she said. 

Andrew Crowell, financial advisor and vice chairman of wealth management at D.A. Davidson, echoed the sentiment, saying that whilemany would argue that the right time to hire a financial advisor is when life becomes more complicated as can be the case with marriage, divorce or the birth of a child.

“However, in our experience, even young workers and investors in their 20s would benefit greatly from the counsel of a financial advisor to get them started on the right foot financially with good fiscal habits,” said Crowell, adding that a financial professional can help individuals in their 20s pay down debts such as student loans, take advantage of their employer’s 401(k) and match, evaluate Roth versus traditional contributions, build an emergency reserve and draft a will or health care power of attorney. 

“Young investors also have the power of compounding on their side, so developing an appropriate asset allocation strategy to take advantage of that can get their financial journey launched in a positive direction which will benefit them greatly in the future,” he added. 

It could prevent you from making early mistakes later in life.

The sentiment was echoed by other experts, who said that financial mistakes early in life can be difficult to remedy.

“When we get sick we go to the doctor. When we get into legal trouble we hire a lawyer. Yet, somehow people believe that they should be able to navigate the ever increasingly perilous financial waters without professional help,” said Robert R. Johnson, Ph.D., CFA, CAIA, professor of finance, Heider College of Business, Creighton University.

According to Johnson, financial mistakes, particularly early in life, can be difficult to overcome and many people fail to establish a relationship with a qualified financial advisor.

“Financial advisors help you stay the course during volatile times. Some people mistakenly believe that the services of a financial advisor are only needed in the wealth accumulation stage,” he said, adding that they are essential throughout one’s lifetime!

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