Do I Need a Financial Advisor? 5 Times Guidance Can Help

Sometimes the reason to ask for help isn't how much money you have. It's what's happening with it.

There's no rule for when you're supposed to start working with a financial advisor.

You might manage your money on your own for years and feel perfectly comfortable doing it. Then you change jobs, inherit money, start thinking seriously about retirement, or realize your finances take a lot more work than they used to.

Here are five times when getting some help may make sense.

1. Something changed in your life

Getting married, getting divorced, having a baby, changing careers, losing a spouse, receiving an inheritance, and retiring can all affect your finances.

The questions depend on what happened.

After getting married, you might need to update beneficiaries, review insurance, combine some expenses, and figure out what you're saving for together.

A new job comes with a different set of decisions: what to do with your old 401(k), which benefits to choose, and how the new compensation package affects what you're saving.

When several things need attention at once, it can be useful to have someone help you work through the list.

2. Your finances aren't as simple as they used to be

Maybe you started with a checking account, a savings account, and a 401(k).

Years later, you've collected a few retirement accounts. You have investments outside of work. Your compensation includes company stock. You bought a rental property or started a business.

Now a decision in one place can affect what you do somewhere else.

If a large portion of your net worth is in company stock, for example, that matters when you're deciding how to invest the rest of your money. Selling some of it could also affect your taxes.

At a certain point, keeping track of how everything fits together can become a job of its own.

3. You're making a decision you haven't made before

Most people don't get much practice deciding when to retire.

The same goes for choosing a pension option, selling a business, deciding what to do with an inheritance, or figuring out how to turn decades of retirement savings into income.

You can research all of those decisions yourself.

You may also reach a point where you'd like someone to run the numbers with you before you choose.

4. You keep putting financial tasks off

You know the beneficiary on an old account needs to be updated.

You've had the same 401(k) sitting at a former employer for years. You haven't looked at your life insurance since your kids were little. You'd like to know whether you're saving enough for retirement, but you've never actually sat down and figured it out.

None of it feels urgent enough to win on a busy Tuesday.

Working with an advisor gives those tasks somewhere to go. You can figure out which ones need attention first and stop relying on yourself to remember them six months from now.

5. You're spending a lot of time wondering if you're doing it right

You've run the retirement calculator again.

Then you changed the assumptions and ran it again.

Or you're checking your investments every time the market has a bad week. You've been trying to decide how much house you can comfortably afford. You and your spouse keep circling the same money question without getting any closer to an answer.

Sometimes you don't need more information. You need to make a decision with the information you already have.

Having someone else work through the numbers with you can make that easier.

Do you need an advisor?

You might not.

If you're comfortable managing your finances and the decisions in front of you, there's no reason you have to hire someone simply because you've reached a certain point in life.

But if you're staring at a financial decision you keep researching, postponing, or worrying about, getting another perspective may be useful.

That's a perfectly good reason to ask for help.

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summary

A financial advisor may be useful after a major life change, when your finances have gotten harder to manage, or when you're facing a decision you haven't made before. Getting help can also make sense when financial tasks keep falling off your list or you find yourself repeatedly second-guessing the same decisions.