Do I need a financial advisor?

Managing your finances can sometimes feel overwhelming, even for people who are good at it. If you've ever asked yourself, "Do I need a financial advisor?" you're in the right place.

A financial advisor* offers more than just financial and investing advice. They help you create a comprehensive plan that covers every aspect of your financial life, including budgeting, saving, investing, taxes, estate planning, and planning for retirement and insurance.

A financial advisor can also help you set short- and long-term goals and create strategies to reach them. These goals might include building an emergency fund, saving up to buy a car or take a vacation, putting a child through college, or maintaining your lifestyle in retirement.

When is a financial advisor right for you?

Major life changes are often the perfect time to ask, "When should I get a financial advisor?" Perhaps you've landed a new job with a higher income. Maybe you’ve received an inheritance that you’re not sure how to manage. Or you may have gotten married recently or started a family. These are all situations where you may need a financial advisor because they can help you navigate these milestones.

Here are a few key life events where a financial advisor's guidance can be invaluable.

1. Getting married or divorced

Whether you’re starting newlywed life or going through a divorce, you're dealing with complex financial factors alongside new emotional and relationship landmarks.

A financial advisor can help you make informed decisions about individual or joint bank accounts, investment accounts, and how to merge or divide assets.

2. Getting a raise

Whether your bank account is growing because you got a promotion or changed jobs (or both), you may find yourself wondering about the best way to save and invest your money. Working with a financial advisor can help you answer important questions, such as:

• How much should I contribute to a 401(k) or other employer retirement plan?
• How should my investment portfolio change?
• How much should I put toward paying off debt?
• How much should I set aside in an emergency fund or for other goals?

3. Buying or building a new home

The process of starting fresh in a new home is thrilling—and sometimes overwhelming. Before you break ground or make an offer on a new house, it’s important to assess the risks and long-term financial commitment that comes with owning real estate.

A financial advisor can walk you through the budgeting process and advise you on how to balance the costs of homeownership with your other financial goals.

4. Managing debt and financial stress

Managing debt can be a major source of financial stress, but a financial advisor can provide debt and finance advising to help you take control. They can work with you to create a personalized debt repayment plan, help you prioritize high-interest obligations, and balance debt reduction with other goals like saving for retirement.

An advisor can also offer guidance on how to improve cash flow management and recommend strategies that could help reduce the risk of future debt.

5. Receiving an inheritance

Inheriting money can be a life-changing event, leaving you with many decisions to make, such as how to carry on the legacy of the deceased and how to ensure the new funds enrich your life instead of burdening it.

A financial advisor can take an objective look at your inheritance and help you establish your priorities, which may include:

• Paying down debt
• Adding to your emergency fund
• Saving in your retirement accounts
• Tailoring an investment strategy for your financial goals and risk tolerance
• Increasing your charitable contributions

6. Nearing retirement

The closer you get to retirement, the more questions you might have. You may wonder: Do I have enough money to retire? How can I save more? How can I make my money last as long as possible?

These questions bring up a larger one: Do I need a financial advisor in retirement? As you assess your needs, know that a financial advisor can help you determine:

• What your ideal retirement looks like
• When to apply for Social Security retirement benefits
• Your preferred withdrawal strategy and investment options

Are financial advisors worth it?

So, are financial advisors worth it? They may provide value if you want to create or update your financial plan, or if you’re going through a life transition where you could benefit from objective financial advice. They may also provide value if you feel challenged in managing your personal finances.

A financial advisor may help you identify opportunities to work toward your goals and stick to your plan, freeing you from the stress of doing it yourself.

How to choose the right financial advisor

A financial advisor often provides more than just stock market recommendations. When you're looking for where to get a financial advisor, you'll want to find a partner who can advise on multiple areas of your financial life. You may feel confident in one aspect of your financial life and still tap into an advisor’s expertise for another area.

Here are a few factors to consider when choosing a financial advisor:

• Areas of expertise. Some financial advisors specialize in areas like estate planning, investing, tax planning or retirement. Ask about any specialized expertise that would be relevant to your goals and needs.
• Credentials. Look for common credentials like Certified Financial Planner (CFP®), Chartered Financial Analyst (CFA®), or Chartered Financial Consultant (ChFC®).
• Fees. Financial advisors use various fee structures, including flat fees, transaction fees, commissions, or a percentage of assets under management (AUM). For example, an advisor might charge 1.5% of AUM up to $150,000 and a slightly lower percentage as AUM rises. Ask about their compensation structure and make sure it’s straightforward.
• Flexibility. Is the advisor available to meet and work with you in format convenient to you?
• Fit. Choosing the right financial advisor is about more than just looking at technical qualifications. You should also look for someone who has a similar financial philosophy and feels like they would be a good fit. Your financial advisor will become one of your most important partners, so try to choose someone whose personality and style will be a good fit with yours.
• Fiduciary status. You may want to inquire whether a financial advisor is working under the fiduciary standard, which means they must make recommendations that are in your best financial interests.

If you’re ready to find a financial advisor, you don’t have to look far. Start working with a financial advisor from U.S. Bancorp Investments today and create a strategy customized to your financial goals.

*For purposes of this content, a financial advisor is required to register with the SEC, which grants the Registered Investment Advisor (RIA) title. Financial advisors are legally obligated to act in your best interest and disclose any conflicts of interest related to managing your finances. It is possible to hold multiple titles; for instance, an advisor might be a CFP as well as an RIA. Always verify the title of a professional before you seek guidance.