Think financial advisors are just for the rich? Think again. In today’s complex financial landscape, expert guidance isn’t a luxury — it’s a necessity for nearly everyone.
Whether you’re a middle-income professional in your 40s planning for retirement or just starting to build your nest egg, a financial advisor can be your ally in navigating the path to financial security.
In years past, the financial advisory business earned a bad reputation, with many advisors pushing high-commission products designed to make more money for themselves than for you.
These days, however, more and more advisors don’t work on commissions. Instead, they charge a flat fee based on account size, so their income only increases when your account value increases. In addition, the industry has evolved to serve clients across all income brackets, not just the rich.
Let’s explore reasons why partnering with a financial advisor will improve your life.
1. Personalized strategies
A good advisor will tailor their approach to your unique situation, whatever your income or asset level. Whether you’re a seasoned investor or just starting out, a financial advisor can help you craft a strategy that aligns with your goals and resources.
They’ll take into account your current financial status, risk tolerance and future goals to create a plan that’s uniquely yours and that will change as you change. A personalized approach ensures that you’re not following a one-size-fits-all strategy, but rather a road map designed specifically for your financial journey.
A Vanguard study found that, on average, a hypothetical $500,000 investment over 25 years would grow to $1.7 million if you manage it yourself, but more than $3.4 million if you work with a good financial advisor.* That’s twice as much!
So how do you find that good advisor? Well, if you’ve got at least $100,000 in investments, check out a free service called SmartAsset. You fill out a short questionnaire and instantly get matched with up to three vetted financial advisors in your area, all legally bound to work in your best interests.
The SmartAsset search only takes a few minutes and doesn’t cost a dime.
Not quite at $100,000 yet? No problem: Keep reading.
*Please carefully review the methodologies employed in the Vanguard white paper, “Putting a value on your value: Quantifying Vanguard Advisor’s Alpha.”
More about expert matching
Back in the day, free matching services like SmartAsset didn’t exist. Either you knew someone good, or you took a swim in shark-infested waters.
Now there are several services connecting you with the right advisor at no cost to you. (They make money by charging the advisor.)
These new platforms serve up a questionnaire, analyze your financial needs and preferences, and then offer multiple choices so you can readily find the perfect advisor for your situation. It’s essentially like having a financial matchmaker working on your behalf, ensuring you find an advisor who understands your unique circumstances and goals.
If you’re just starting out and have less than $100,000 in investments, check out Wealthramp. They interview and vet every advisor in their database, and will find you the right person based on your needs. Then, you simply schedule a review at your convenience and see for yourself if they’re a good fit.
Nothing wrong with getting a second set of eyes and some solid advice without cost or obligation, right?
2. Navigate major life events
Life’s transitions can be financially challenging, but you don’t have to face them alone. An experienced advisor can guide you through major events like retirement planning, marriage, divorce, buying a home, receiving an inheritance, dealing with the death of a spouse and many more challenging situations.
A good advisor has seen it all before, so they can answer questions and offer expert advice when it comes to restructuring your finances after a divorce, maximizing your inheritance or ensuring your retirement plans stay on track.
When life serves up stressful situations, having an expert familiar with you and your situation is a lifesaver.
If you have $150,000 in investments, reach out to a financial advisor marketplace like Zoe Financial, another free matching service.
3. Tax optimization
Advisors can help with tax considerations, potentially saving you thousands.
As you age and your net worth grows, income tax and estate tax planning require additional attention. A skilled advisor can help you navigate the intricacies of tax laws, identifying opportunities to minimize your tax burden and maximize your wealth.
They can guide you through strategies like tax-loss harvesting, strategic charitable giving and optimal retirement account withdrawals. Knowing the best tactics could save you thousands. If you already owe thousands of dollars in back taxes to the IRS, you can also reach out to one of our best tax relief companies here.
Don’t let taxes eat away at your financial future.
4. Investment expertise
Financial advisors bring years of experience and in-depth market knowledge to the table. They can help you diversify your investments, balance risk and reward and adjust your portfolio as market conditions change.
This expertise is particularly valuable as you approach retirement, ensuring your investments are aligned with your changing needs and risk tolerance. An advisor can also introduce you to investment opportunities you might not have considered, potentially boosting your returns.
Money Pickle is another free service that matches you with experienced, ethical financial advisors. They work with people who have a minimum of $100,000 in investable assets.
You simply fill out a brief online questionnaire, and Money Pickle searches its extensive database to find the ideal advisor for your situation. Then, you schedule a totally free online consultation with your chosen advisor to get your questions answered and ensure the advisor is a good fit for you.
5. Long-term planning
As we’ve discussed, a financial advisor can help you create a comprehensive plan that addresses all aspects of your financial life — from retirement savings to estate planning.
But a good advisor will also help you stay disciplined, ignore short-term distractions and stay focused on the long term. Your goals, budgets, strategies and obstacles are going to change over time. Find an advisor who will be there to plan not just for tomorrow but for decades to come.
And speaking of the long term, in many families, only one spouse handles the money. If something happens to that spouse, the family is left in the lurch. That’s why your team should include a reliable expert who knows your family and their needs.
6. Learn and earn
When meeting with potential advisors, one of your first questions should be whether they’re a certified financial planner, or CFP.
The CFP designation is a key credential for financial planning and education. CFPs undergo extensive training — completing classes, passing an exam and logging a minimum of 6,000 hours of professional financial planning experience before earning the CFP designation.
Once you’ve landed that expert, use them. Financial advisors shouldn’t just manage money — they should empower you with knowledge. They should explain complex financial concepts in easy-to-understand terms, helping you grasp the “why” behind their recommendations.
Education extends beyond investment strategies. It includes budgeting tips, debt management techniques and retirement planning essentials. By working with an advisor, you’ll gain the confidence to make smart financial decisions independently, while still having expert guidance when you need it.
7. Dealing with debt
If debt is something you need to tackle, a financial advisor should be able to help. But if the problem is severe, you may want to consult with another free expert: a credit counselor.
For example, if you have $10,000 or more of debt, you could work with a debt relief company to see what your options are. As with financial advisors, credit counselors also offer free initial consultations.
The bottom line
Today’s investment advisors can help make you richer, but they offer a lot more than that. They offer confidence: confidence that you’re going in the right direction, doing the right thing and on the shortest possible path to achieving your dreams.
If you’ve got a minute, connect with a financial advisor right now and start your journey to becoming a savvy, informed investor. Check out a few of the free matching services mentioned above and see what they’re like.
All it will cost you is a little time, and it could be the best decision you ever make.
