Retirement · June 22, 2020

Why You Need a Financial Advisor to Help You Plan for the Future

The moment you ask yourself "do I need a financial advisor?" is a major financial milestone. Whether you started with a stable financial background or you're self-made, acquiring enough money and assets to need some outside help in managing them is a big deal. If you're at the consideration stage, it's time to learn about how using a financial advisor can benefit your and your family's future.

The support you need to reach your goals

Whether your dream is to contribute to your kids' college fund, buy that second home or retire early, a trusted financial advisor can help you make that a reality by providing guidance on a range of topics. These can include investments, tax considerations, saving for retirement and planning for your children's college funds. In this role, an advisor can consult at different stages of your life, which is helpful as your priorities change. Your financial goals will look different when you're recently married and looking to buy your first home than they will when you're at the peak of your career and want to establish a philanthropic legacy.

The longer your financial advisor is with you, the better attuned they'll be to your goals and values, and the more effectively they can offer advice based on your unique profile.

How a financial advisor can help

As you acquire more assets, you'll need to consider new factors such as depreciation and tax reporting. These matters can become complex quickly. Your advisor can help you manage these factors in a way that helps you move toward the lifestyle and future you want. This might involve acquiring more assets, reinvesting what you already have or shifting some of your goals—for example, retiring at 66 might allow you to contribute more and live more comfortably than if you retired at 65.

Advisors can also help you understand how to invest wisely. They can recommend products and strategies based on your goals and your appetite for risk, which is critical to achieving sustainable, long-term returns. A financial advisor should be an objective, non-emotional sounding board. This makes them able to provide a steady hand in tumultuous markets and draw upon a range of experiences to help you make the best choices for you.

The value of objectivity

Even knowing the benefits of working with a financial advisor, some people are reluctant to reach out to one. They may enjoy managing their money themselves, or they may not be convinced that an advisor is worth the money. But it can bring confidence and reassurance to know you have someone providing trusted insights and informed recommendations to help you achieve your long-term goals.

Everyone has blind spots. Financial advisors provide objective analyses of your circumstances. They may notice a tax benefit for which you're eligible but aren't claiming, or they might spot a liability that leaves you vulnerable to penalties down the road. Partnering with someone you trust can help you improve your financial strategies and go beyond your own expertise. Even if you don't consider yourself wealthy, an advisor can help you optimize your financial choices and invest in a way that moves you toward your goals.

How much does a financial advisor cost?

The cost of hiring a financial advisor will vary by company and pay structure. Some advisors will charge a flat rate, such as an hourly fee or a monthly retainer. Others charge a percentage of the investment portfolio you have with them.

Do your research to identify the right potential advisors for you. Find out what their fee structures are and whether they earn money on product recommendations. Transparency is key to building a strong, trusting relationship with your advisor.

Meet your goals with confidence

The best financial advisor isn't just someone you hire to manage your money for you—rather, they should be a partner you trust to provide advice that helps you reach your financial goals. When you meet with any advisor you're considering, make sure you have a comfortable rapport with them. Remember, this person could become a lifelong advisor—choose someone who shares your values and who makes you feel at ease.

If you're feeling at all overwhelmed or uncertain about the next best steps for managing your money, you may have reached a point where growing your wealth requires you to grow your financial management team. Having an advisor you trust at your side can bring a sense of comfort and confidence that you're headed down the right financial path.


A few financial insights for your life

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This information is provided for educational purposes only and should not be relied on or interpreted as accounting, financial planning, investment, legal or tax advice. First Citizens Bank (or its affiliates) neither endorses nor guarantees this information, and encourages you to consult a professional for advice applicable to your specific situation.