When Is It Right Time to Hire a Financial Advisor-Should you Hire a Financial Advisor-Wikipedia of Finance

When Is It Right Time to Hire a Financial Advisor?


While some financial experts claim that hiring a financial advisor saves up to 20% of your annual income, others suggest seeking financial advice only if your financial situation becomes complicated. Here we will understand when is the right time to hire the financial advisor and should you hire a financial advisor?

Since everyone isn’t a financial expert, being educated about wealth management options before your retirement is important when planning your financial future. So lets start with some basic to understand the need of the financial advisor in your money management plan.

Who is a Financial Advisor?

Otherwise known as financial planners, a financial advisor is a professional who advises clients about wealth management, personal finance, and other aspects of handling money. Depending on individual expertise, a financial advisor can provide recommendations on everything, including planning your life insurance or retirement savings.

However, most people don’t see the need to hire a financial advisor, especially with the endless information on personal finance paraded in books, journals, print media, and other online platforms. While reading these publications is a good idea, financial matters are dynamic and keep changing every dawn. Therefore, you would have to spend more time keeping up with the latest changes in insurance regulations, investment options, and other changes to make the right financial decisions.

That said, you will need a financial advisor for the following reasons;

Life Events that Require Financial Planning

In most cases, there are particular events that demand input from financial advisors. Such lifetime events often involve major losses or profits. Consult a financial advisor if you are undergoing or about to undergo either of the following events;

  • Retirement and you want to secure your retirement investments
  • If you just inherited money from your parents
  • Recently married couples
  • Recently widowed or divorced persons also need financial assistance moving forward as a single person
  • If your parents are getting old and they need help managing their finances
  • If you hate investments and need professional help to ensure that you don’t mess
  • If you enjoy financial planning and investments but need a second opinion

Regardless of your status, you may need long-term financial planning for various reasons, including retirement, paying a house mortgage, funding your kid’s education, estate planning, and more. All these are good reasons why you should consult a financial advisor.

For One-Time Financial Assistance

Most financial advisors also provide consultation on a one-time basis for clients looking for an immediate financial plan or who need help with a specific project. Generally, advisors work on these projects at hourly fees or at a flat fee.

For instance, if your employer gives you an early retirement buyout package, you should consult a financial planner to help you make the right decisions. With an advisor, you can be certain of expert choices of incentives offered by your employer, such as pension benefits.

You might also need a financial advisor when developing a broad financial plan or reviewing your current financial status. Apart from helping you understand your finances better, you will benefit from various insightful steps and roadmaps from these experts. Note that most one-time engagements often evolve into full-time advisory or regular financial consultations.

When to Hire Full-Time Financial Advisor

The same way you would seek financial advisory services for a one-time or short-time need, it also makes a lot of sense to consult a financial advisor on a full-time basis. While different advisors work differently, most of them provide arrangements for ongoing investment management and ongoing financial planning advice. Some of the ongoing issues that require input from a financial advisor include tax planning, preparation for retirement, estate planning, saving for your kids’ education, and other issues.

Unlike one-time consultations where payments are on an hourly basis, payments for full-time financial advice are sometimes done as a percentage of the entire investment, while others may charge a flat retainer fee. In such arrangements, the advisor and investor formally meet, either virtually or in person, several times annually. However, the client has access to the financial advisor as needed and can ask questions or raise issues anytime.

The main benefit of using this arrangement is that you will have a professional watching over your assets and benefit from expert advice throughout various investment stages.

Can Financial Advisors Hurt?

While financial advisors provide expert and insightful financial advice, they are sometimes misleading. Working with an incompetent or dishonest financial planner can cost you your investment. Below are some ways that financial advisor can hurt your investments;

  • Churn your finances – some advisors can channel your resources into investments that generate high commissions for themselves.
  • Bad planning – some advisors don’t consider changes in interest rates and the economy when creating financial plans.
  • Expensive investments – opting for investments with a high expense ratio while other low-cost funds can perform better.


Financial advisors are undoubtedly important in the current volatile economic and investment atmosphere. However, while some may be beneficial, others are bound to mess up your investments. Therefore, ensure that your advisor commits to a fiduciary duty before hiring, which requires that you consult an attorney.

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