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10 Signs It Is Time to Work with a Financial Advisor

Signs It Is Time to Hire a Financial Advisor

There are many reasons to consider hiring a financial advisor. You may even feel like you are nearing a point where you think it is time to seek professional help. But what does a financial advisor actually do? How can you ensure you are getting quality advice?   How can you tell if the advisor is reputable and has the knowledge, experience, and skillset to help you? And how do you know if it is the right time to bring on a financial advisor? In this article, we will answer all of these questions and more!

What Does a Financial Advisor Actually Do?

A financial advisor (also referred to as a financial planner or wealth manager) helps to:

  1. Build a clear picture of where you are now and evaluate your circumstances, 

  2. Work with you to formulate what you want to achieve and clearly define your goals and objectives, and 

  3. Develop a framework utilizing tools, strategies, and expertise to bridge that gap.

Great! But what does that mean in practicality?

Financial planning encompasses five fundamental areas of focus:

  • Investment Management and Advising,

  • Retirement Planning,

  • Income Tax Planning and Projections,

  • Estate Planning and Legacy Building, and

  • Insurance and Risk Management Planning.

Within each of these five areas, there are numerous subspecialties that may be included in a firm's service offerings, including: social security analysis, student loan analysis, college funding planning, debt management, employer stock option analysis, 401(k) administration for business, charitable gifting strategies, and much more! To see a list of our service offerings, check out the What Services Do We Offer? page on our website.

You may not need every service the firm offers; therefore, try to find an advisor whose strengths meet your specific needs. Conversely, you may want a comprehensive financial plan in which the advisor analyzes all five areas of your financial life and provides strategies to optimize your wealth holistically.

How Can You Ensure You Are Getting Quality Advice?

For the most part, finding an honest financial advisor is a qualitative experience.  In the end, it boils down to you being able to answer the question, 'Can I see this person getting to know me well enough so that I can trust them to always act in my best interest?' It is vital to the entire financial planning process that the advisor takes the time in those first few meetings with you to ask lots of questions and really get to know you. Additionally, it is super important that they explain matters in ways that you can understand and clearly comprehend your goals and values well enough to help you stick with your plan.

One crucial point to remember, especially for those who may not have worked with a financial advisor before, is that if you want help, it is not because someone is smarter than you but because that person is not you.  When you hire a professional advisor, you ask them to do what you cannot: guide you to make unemotional decisions about your money.

How Can You Tell If the Advisor Is Reputable and Has the Knowledge, Experience, and Skillset to Help You?

There are several ways to get a sense if you are hiring a quality financial advisor. One way is to look at the advisor's designations. Having letters after an advisor's name demonstrates their commitment to excellence in their field and ongoing learning through continuing education requirements to maintain good standing for the designation. However, today, there are so many different professional financial designations that it can be challenging to know whether they mean anything. Not to mention that some advisors may have an alphabet soup after their name, which can be a bit overwhelming. Some common ones you may see are CERTIFIED FINANCIAL PLANNER™ (CFP®), Chartered Financial Analyst (CFA), and Chartered Financial Consultant® (ChFC®). Financial professionals dedicate thousands of hours of experience, rigorous coursework, and challenging exams to earn these certifications.

You should also look for advisors who are a fiduciary. This means that the financial advisor is legally and ethically required to put your best interests ahead of their own and that of their firm. Further, if a conflict of interest arises, a fiduciary must disclose it to you while continuing to put your interests ahead of their own.

It is also a good idea to look for a fee-only financial planner. This means that they are only paid based on an agreed-upon fee between you and the advisory firm – they do not receive commissions or kickbacks, and do not receive additional compensation that is performance-based. This ensures that your advisor is not profiting from recommending anything other than what is best for you.

There are some great websites to help you find reputable advisors, some of which are below:

  • Let's Make a Plan – a search tool created by the CFP Board to find CFP® professionals.

  • FPA PlannerSearch® – the Financial Planning Association's search tool to find CFP® professional members.

  • Find An Advisor from XY Planning Network (XYPN) – the XY Planning Network is an organization of fee-only financial planners. Finding an advisor on this platform ensures you are getting a fee-only advisor.

  • Find an Advisor from the National Association of Personal Financial Advisors (NAPFA) – similar to XYPN, NAPFA is an organization for fee-only financial planners. This platform will also ensure you find a fee-only advisor.

  • BrokerCheck by FINRA – a tool to help research the background and experience of financial brokers, advisors, and firms. This will show what licenses the advisor currently holds and whether they have any regulatory disclosures against them (such as customer complaints or arbitrations, regulatory actions, employment terminations, bankruptcy filings, and certain civil or criminal proceedings they were a part of.)

How Do You Know If It Is the Right Time to Work with a Financial Advisor?

Whether now is the right time to work with a financial advisor comes down to when you feel ready. There may be firms that require you to meet specific criteria to take you on as a client (e.g., investable assets, annual fees, fitting a certain client profile, etc.), but plenty of firms also have no requirements or minimums of any kind. With that said, here are some reasons you may be thinking now is a good time to work with a financial advisor:

  • You Want Help Managing and Investing Your Money – investing can be scary, overwhelming, and confusing. If you find that you do not have an investment strategy or are unsure of the amount of risk you are taking (or should be taking), these may be signs that you should seek out advice from a financial advisor. Other things advisors can help with include: 

    • Strategizing how much of your money should be invested in stocks (long-term), bonds (intermediate-term), and cash (short-term), 

    • Identifying financial opportunities or risks,

    • Advising on account types, including using tax-advantaged retirement accounts versus taxable accounts, Roth versus pre-tax retirement accounts, etc.,

    • Rebalancing your portfolio periodically to adjust for changes in your investments and the markets, and

    • Understanding tax consequences with certain investments and offering tax savings strategies.

  • You Experienced a Major Life Event – this may be getting married or divorced, having a baby on the way, buying a house, retiring, starting or selling a business, etc.

  • You Are Having Trouble Remaining Objective – to some extent, everyone suffers from cognitive biases that make it challenging to make sound decisions independently. These biases often lead us to take mental shortcuts that stand in our way of successfully balancing reason and emotion. By seeking the advice of an objective third party, whether an accountant, an attorney, or a financial advisor, you are asking someone you trust to illuminate the blind spots that, by their nature, you are unable to see.

  • You Have Too Many Things to Juggle – we all have lots of things competing for our time. You may be approaching a point where you no longer want to handle your finances alone. Alternatively, you may have a complicated financial decision on the horizon but lack the bandwidth or interest to figure out how to deal with it. Working with a financial advisor allows you to focus more on doing the things you love, like spending time with your kids, taking trips with your spouse, and developing new hobbies.

  • You Have Competing Needs and Wants – frequently, before someone starts working with an advisor, individuals have lots of ideas swirling around in their heads. Consequently, these individuals often fall prey to analysis paralysis and never take the necessary steps toward achieving their long-term goals. One of the first items advisors will help you clearly define is your goals. In addition, advisors also work with you to prioritize those goals when competing needs and wants get in the way of implementing a financial strategy.

  • You Need Specialized Advice – lots of financial advisors have specialties or only work with a certain niche group of people. Maybe you want an advisor who only works with business owners and entrepreneurs, tech employees, individuals who wish to retire early, etc. There are many different groups of people that advisors may work with. If you feel like you fit into a niche group and you want an advisor who only works with individuals like you, odds are you can find someone to help. For example, we predominately work with individuals in or near retirement, young professionals, intergenerational families, and small business owners (learn more about the clients we work with here).

  • You Have Outgrown the Do-It-Yourself Investing and Financial Planning Tools – there are fantastic free, easy-to-use tools out there for people who prefer to manage their finances on their own. However, as your assets grow, your entire financial picture gets more complicated. You start to push the bounds of your knowledge on certain financial subjects, and you will inevitably find that the DIY tools no longer sufficiently serve you. Moreover, these tools are designed for a wide range of people, but you may need more nuanced advice beyond the robo-advisor, online retirement planning tools, or news articles about tax or estate planning moves 'everyone should make.'

  • You Want a Second Opinion On Your Goals and Strategies – this is especially useful for individuals who have been investing and planning on their own for a long time and want to continue to do so. Getting confirmation from a financial professional that you are doing all the right things gives you peace of mind. Also, an objective voice could point out something you are missing, offer accountability, and provide strategies to get you back on track. To learn more about the second opinions that we offer, check out our website.

  • You Recently Received a Windfall or Inheritance – when you receive a large sum of money all at once, you probably will experience a wide range of emotions and competing demands depending on the circumstances. Consequently, it can be challenging to know what to do with that money, how to preserve it and make it grow, or utilize it for prudent things in your own life. A financial advisor can help you make intelligent choices with your new money.

  • You Have Taken On the Complicated Role of Managing An Estate or Trust – we have seen this several times where a relative lists you as the executor of their estate and/or successor trustee of a trust. You may have no idea where to start. A financial advisor can help you work methodically through estate proceedings, as well as work with estate planning attorneys for legal matters and with accountants for tax considerations.

Ready to Find a Financial Advisor? What Questions Should You Ask Before You Hire Them?

So, you are ready to work with a financial advisor. You have done your due diligence and scheduled interviews with quality candidates. What should you talk about, and what should you ask them? Here are a few questions to assist you in making your decision to determine who will be the best fit for you:

  • Are you a fiduciary? What qualifies you to act as a fiduciary?

  • What is your experience, credentials, and qualifications?

  • What types of clients do you typically work with?

  • What services do you offer?

  • Can you describe your investment philosophy and how you manage risk?

  • What would our relationship look like if I moved forward with you?

  • Where will my assets be held, and are there any additional fees or costs associated with them?

  • How often will I hear from you, and who do I call with questions?

  • How are you compensated? What is your fee structure? What does that include? And do you receive compensation for our relationship from anybody other than me?

To discuss these questions and learn more about how Holzberg Wealth Management can help you achieve your financial goalscheck us out! You can schedule a complimentary, no-obligation call with us here.

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About the Author

Holzberg Wealth Management is a family-owned and operated financial planning and investment management firm based in Marin County, CA. As your financial advisors, we serve you as a fiduciary and are fee-only, so we never receive commissions of any kind. We help individuals and families like you in the greater San Francisco Bay Area and virtually nationwide with the financial decision-making process to organize, grow, and protect your assets.

** This writing is for informational purposes only. The author and Holzberg Wealth Management do not guarantee or otherwise promise any results that may be obtained from using this report. No reader should make any investment decision without first consulting their financial advisor and conducting their own research and due diligence. These commentaries, analyses, opinions, and recommendations represent the personal and subjective views of the author and do not constitute a recommendation, offer, or solicitation to make any securities transaction. The information provided in this report is obtained from sources that the author believes to be reliable. External links to third parties are being provided for informational purposes only. Holzberg Wealth Management is not affiliated with the third-party websites linked to, unless otherwise explicitly stated, and does not constitute an endorsement or approval by Holzberg Wealth Management of any of the third party’s products, services, or opinions.


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