Is hiring a financial planner worth it? The cost of hiring a professional might seem unnecessary, especially if you’re still decades away from retirement or feel confident in your personal finance skills.
But you don’t need to be close to retirement or interested in complex investments to make hiring a financial planner worth it. No matter where you are in your career or what your financial situation looks like, a professional can provide clarity and strategic advice.
Even more importantly, a financial planner can help you identify your values and guide financial decisions that align with your priorities. Let’s take a look at what it really means to work with a financial planner so you can decide if it’s the right approach for you.
What Does a Financial Planner Do, Exactly?
A common misconception about financial planning is that it’s primarily valuable for people who have a high net worth or who are close to retirement. While a planner can certainly help you manage your investment portfolio and prepare for retirement, they can provide support and guidance in many other areas.
A financial planner can offer advice for every aspect of your finances, including helping you find ways to:
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- Reduce your tax liability
- Manage financial risk
- Prepare for unexpected events and emergencies
- Reach specific goals, like buying a home or reducing debt
- Save for a comfortable retirement
A good financial planner will offer guidance based on what matters most to you. They can look at your whole financial picture and help you make informed decisions that match your priorities.
The Value of Financial Expertise and Objective Advice
Financial management is often more complex than it seems. It’s easy to get overwhelmed with all the minutia of retirement planning, investment strategies, tax laws, and market trends.
A financial planner has the knowledge and skills to guide you through those complicated topics. Additionally, they can provide advice from a unique perspective, offering objectivity that can help you navigate the emotions that naturally arise when managing your money. Having access to unbiased advice can reduce your risk of making mistakes, especially during challenging scenarios like market volatility or life transitions.
But what if you feel comfortable with managing your budget, paying your bills, and contributing to your 401(k). Do you really need a financial planner?
Even if you’re confident about the basics of financial management, you can still benefit from working with a planner. They can help you take a big-picture view of your finances and guide you through unexpected challenges to your long-term goals.
The Cost of DIY Financial Planning
One of the most common objections to hiring a financial planner is the cost. It’s true that working with a professional isn’t free. But the potential cost of not working with a professional can be far higher.
Managing your finances yourself often leads to:
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- Ineffective tax strategies
- Inadequate retirement savings
- Over- or underestimating retirement distributions
- Suboptimal investments
- Poorly managed risk
A planner can help you avoid making mistakes and missing opportunities. For many people, the potential missed opportunities far outweigh the expense of hiring a professional.
Is It Time to Hire a Financial Planner?
While most people can benefit from hiring a financial planner, that doesn’t necessarily mean you have to hire one right away — or work with one consistently for your entire life. How do you know if now is the right time to start working with a planner?
These are some situations when it may make sense to hire a financial planner:
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- You’re getting close to retirement and aren’t sure whether you’ve saved enough
- You’re newly retired and unsure what your budget should look like now
- Your finances have become complicated due to multiple income streams, self-employment, or complex investments
- You need to create or modify your estate plan
- You’re going through a major life event such as marriage, a career change, a new baby, or divorce
- You’ve received an inheritance or financial windfall
If you’re facing one of these situations or something equally complex, now could be the perfect time to start working with a planner. They can help you stay focused on your priorities and ensure that your decisions are aligned with your values.
The Return on Investment of Working with a Financial Planner
So… is working with a financial planner worth it? The advantages of working with a financial planner aren’t limited to just avoiding potentially costly mistakes. You could also see measurable financial benefits once you start working with a professional.
Here are some of the potential rewards of working with a financial planner:
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- Optimized retirement contributions and increased savings
- Reduced tax liability
- Cost-effective strategies for healthcare expenses
There are also intangible benefits. A planner can help ensure that your money is working for you and give you the peace of mind that comes with knowing your financial figure is secure.
What to Look For in a Financial Planner
Let’s say you’ve decided that now’s the time to start working with a financial planner. How do you know which one to hire? It’s crucial to make sure you find a planner who offers all the benefits you expect. Here are some things to look for:
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- Professional credentials, such as a CFP® certification
- Fiduciary responsibility (a commitment to act in your best interest)
- Transparent pricing
- Similar priorities and values
- Personalized guidance
An exceptional financial planner will provide a customized experience and offer guidance that’s based on your unique situation and goals. Find a professional who wants to build a partnership based on trust and respect.
Ready to Work With a Financial Planner?
Is it worth it to hire a financial planner? The answer depends on your personal financial situation, goals, and values.
However, if you want to feel confident that your money is working for you, a financial planner can help. Look for someone with professional credentials and a commitment to helping you make progress toward your personal goals.
Here at Guiding Wealth, we believe in values-driven financial planning. We don’t offer generic plans or require clients to pursue conventional goals.
If you want to plan for retirement or manage debt, we can help! But if starting a business or traveling the world is more important to you, we’ll offer the guidance you need to get there.
Ready to experience the benefits of working with a financial planning team that cares what matters most to you? Schedule a consultation to get started.