5 Signs You Need a Financial Advisor

Learn when it's time to get professional financial advice.

What is most on Americans’ minds? Money.

GOBankingRates found in a survey of more than 5,000 adults that those polled thought about money and work more than any other topics. They are most worried about always living paycheck to paycheck and find it challenging to stick to a budget and save for retirement, according to the 2015 Life + Money Survey.

Despite their concerns, most Americans are trying to overcome their financial challenges and fears on their own. Nearly 70 percent of adults are taking a self-directed approach to planning — which might make matters worse for them, according to the Northwestern Mutual Planning and Progress Study 2015.

“When people get sick they go to a physician. When people get into legal trouble they go to a lawyer,” said Robert Johnson, president and CEO of The American College of Financial Services, which provides education for financial professionals.  “Yet, people somehow believe that they can navigate the complex financial markets without the assistance of a professional.”

Perhaps you need the help of a financial planner but don’t realize it. Johnson said there are several signs that you should hire a professional to help you with your finances. Here are the five main indicators:

Read: Infographic Illustrates Why Americans Need a Financial Planner

1. You Earn a Decent Living But Don’t Have the Discipline to Save

The GOBankingRates survey found that 19.8 percent of adults said their biggest challenge was planning for retirement. Johnson said one sign you need the help of a financial professional is if you are progressing in your career and earn enough to set aside money for retirement, but can’t develop the discipline to invest for the future.

Many people fail to take the steps to save for themselves if they do not have a financial advisor holding them accountable, said Michael Hardy, a certified financial planner (CFP) and vice president at Mollot & Hardy in Amherst, N.Y.

A planner will help you create a budget so you can determine how much you can set aside. Advisors also help you figure out how much risk you are willing to take and how much you should take when it comes to investing. Then, the advisor can “structure a savings and investment plan that is objective and realistic,” Johnson said.

2. You Are Not Sure You Save Enough for Retirement

Fewer than half of Americans have calculated how much they need to save for retirement, according to the U.S. Department of Labor. Without knowing how much you need to save, it is hard to create a plan to set aside enough for a comfortable retirement.

“Unfortunately, most people are not saving nearly enough to be able to retire when they would like to,” Hardy said.

This is especially a problem for those nearing retirement. The GOBankingRates’ survey found that baby boomers were almost five times more likely than millennials to view planning for retirement as their biggest challenge.

Hardy said he has seen this personally. The biggest concern of older adults who come to him for help is whether they will have enough assets to live a comfortable retirement, and, if not, what do they need to do to get there. A planner can help you figure this out.

Related: 28 Retirement Mistakes People Make

3. You Do Not Know How to Build an Investment Portfolio

According to the GOBankingRates survey, less than 10 percent of adults said that building an investment portfolio is their biggest financial challenge. Still, a much larger percentage likely struggle with creating a portfolio, even though they do not consider it to be their biggest challenge.

“Very few people feel confident enough to put together their own portfolio that takes into account risk tolerance, costs, asset allocation and time frame,” Hardy said. “It can be complicated for the average investor.”

The investments you choose can affect how much money you’ll have in retirement. “I am amazed that some young individuals with a very long time until retirement choose very conservative asset allocations,” Johnson said. “This can cost them hundreds of thousands of dollars when it is time for them to retire.”

A financial planner can help you create an investment portfolio that will help you reach your goals. A good advisor won’t use a cookie-cutter approach, either. The portfolio will be based on your risk tolerance, age and other factors, such as your tax bracket.

Related: 7 Fears That Keep You Poor

4. You Do Not Know How to Create a Long-Term Plan

The most common fear of those surveyed by GOBankingRates is always living paycheck to paycheck, and the biggest challenge is sticking to a budget. Both of these issues are related to poor planning. Unfortunately, many Americans do not have a financial plan.

Creating a financial plan can be difficult for because most people are uncomfortable examining their own financial situation, Hardy said. “Sometimes it is easier and less stressful for someone else to create a plan and hold us accountable than doing it on our own,” he said.

If you’re confused about how to set financial goals and what you need to do to achieve them, a financial planner can help. “A financial planner will help you look holistically at all of your assets and help you develop a plan that is right for you,” Johnson said.

Advisors create a plan based not only on your investments such as stocks and bonds, but also on assets such as real estate, life insurance and even your own human capital, or earning power.

5. You Are Afraid You Will Lose All Your Money in the Stock Market

The GOBankingRates’ survey found that the biggest financial fear of 7 percent of adults is losing all of their money in the stock market. This sort of fear can lead people to avoid investing altogether, financial experts say. Or it can cause people to jump in and out of the market, which can hurt their returns over time.

“The short-term vagaries of the financial markets should not change your long-term investment plans,” Johnson said.

If recent events in the market have changed your feelings on how you should invest assets, you need a financial planner, Johnson said.  A planner can help ease your fears and create a diversified portfolio that will allow you to ride out the ups and downs of the market.

Read: 9 Safe Stocks for First-Time Investors

How to Hire a Planner

Many people mistakenly assume they can’t afford to hire a financial professional, Johnson said. “It is my belief that the return on investment of enlisting the help of a financial professional is one of the best investments the typical individual can make,” he said.

Johnson recommends looking for professionals with designations such as CFP, chartered financial analyst (CFA) and chartered financial consultant (ChFC), to name a few. These individuals must meet strict standards to receive these designations and must abide by ethical codes.

You can find some planners that charge by the hour, such as those in the Garrett Planning Network. It is usually best to stick with fee-only planners who do not work on commission. You can find one near you through the National Association of Personal Financial Advisors. If you’re really on a tight budget, GOBankingRates is offering people the opportunity to get free financial help through our What’s Next initiative.