Do I Need a Financial Advisor?

For some investors, a financial advisor can be a big help.

A financial advisor is a professional who can help you with any number of planning needs, from retirement savings to tax consequences to basic financial strategies. But this type of financial advice doesn’t come without cost. Some advisors charge annual fees for their services, whereas others might only get paid via commissions on any trades you make.

Learn what one of these professionals can offer, and assess whether or not the benefits outweigh the costs so you can better decide if it’s time to find a financial advisor.

What a Financial Advisor Can Do

A good financial advisor can help plan every aspect of your financial life. Typical services offered by a financial advisor include:

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  • Budgeting
  • Retirement planning
  • Estate planning
  • Cash management
  • Tax planning
  • Charitable giving strategies
  • Debt reduction
  • Investment planning
  • Income planning
  • Wealth management

Within these broad categories, a financial advisor can tailor services to your exact financial needs. For example, a good advisor will learn your investment needs and risk tolerance to help suggest an appropriate asset mix for your portfolio.

Related: America’s Top Money Experts Share Their Best Advice

Who Might Benefit Most From Working With an Advisor?

Although there’s no denying the services that an advisor can provide, they might not be worth the cost. When you have a simple portfolio and a good handle on your finances, you might not need to spend the money for professional advice.

Here are some scenarios where hiring an advisor can make sense:

You don’t have to wait until you have a major change in your life to seek out financial assistance, however. Anytime you feel overwhelmed in your financial life — whether you can’t seem to make ends meet every month or you just want to feel more secure about your future — you should consider that a sign to seek professional help.

Check Out: Americans Are Flocking to This Unlikely Source for Finance Advice

How Paying for an Advisor Can Actually Save Money

When hiring an advisor who charges an annual fee, you can expect to pay between about 0.50 percent and 1.65 percent of your assets for services. And, believe it or not, paying a fee can actually save you money because good advice is valuable.

Here are three key financial areas that would benefit from an advisor’s services:


One example is in the area of taxation. When you buy and sell securities like stocks in a regular investment account, there are tax consequences.

Your trades can prove costly if you don’t know the difference between short-term and long-term capital gains, for example. A trade you make one day later might save you hundreds or even thousands of dollars in tax — a savings well worth your payment to a financial advisor.


Another area where a financial advisor can save you money is in life-planning issues. Although you might be able to save money on your investments if you do some research and only select high-performing, low-cost mutual funds, for example, a no-fee broker isn’t going to be able to provide in-depth, money-saving advice regarding long-term care or the costs involved when assets are transferred after a death. If you don’t understand all of your options in these types of situations, you can end up spending far more than necessary.

Learn: How To Find the Best Financial Advisor for You


Once you’ve reached retirement, a good advisor can help you save money by devising an efficient income strategy. For example, taking too much money out of your IRA when you retire might cause you end to pay more tax than you have to; additionally, you might not have enough money left in the account to last you through retirement.

Another consideration is when you should file for Social Security. Making your non-revocable selection at the wrong time could cause you to end up with less money in your pocket than you should have.

Do I Need a Financial Planner?

Like any financial decision, when choosing whether or not you should hire a financial planner, you should weigh the benefits against the costs. A good financial advisor certainly does have the ability to save money for a wide range of investors. And beyond the financial planning aspect, some investors benefit from having a professional hand to hold when financial markets become uncertain.

Additionally, when you’re experiencing dissatisfaction with the investment results you’re getting on your own, or you’re faced with confusing life planning issues, a personal financial advisor might be just what you need.

Read More: I’m No Millionaire, but I Need a Financial Advisor

About the Author

After earning a B.A. in English with a Specialization in Business from UCLA, John Csiszar worked in the financial services industry as a registered representative for 18 years. Along the way, Csiszar earned both Certified Financial Planner and Registered Investment Adviser designations, in addition to being licensed as a life agent, while working for both a major Wall Street wirehouse and for his own investment advisory firm. During his time as an advisor, Csiszar managed over $100 million in client assets while providing individualized investment plans for hundreds of clients.