The Tell-All Series: Do I Need a Financial Advisor?

In Part I of this blog series we outlined the different ways in which financial advisors make money, in Part 2 we looked into the differences between a broker and a registered independent advisor (RIA), and in Part 3 we discussed what value a GREAT advisor offers to their clients.

That’s great and all, but do YOU fit the description of someone that needs an advisor?

In this blog, Part 4, we provide a couple of profiles, all with different personal financial situations and needs. These examples are not meant to be recommendations or to cover every scenario under the sun, but rather to serve as a starting point on the journey of financial-awareness.

Sarah – single, 24 years old

Does Sarah need a Financial Advisor? No

Sarah is young, has no debt, no dependents or partner and she is saving every month. Instead of spending the $1,000 she might spend on an advisor, she should contribute this amount directly towards building an emergency fund. If she wants to get more organized, she can download our free budget excel spreadsheet, use free online finance software options like Mint and read our free guides to educate herself as her life stage starts to change.


Michael and Stephanie – engaged, both 29 years old

Do they need a Financial Advisor? Probably

After they marry, their individual finances merge, and considering the number one cause of stress in relationships is money, a great financial advisor can help set some good financial habits as a couple from the start.

At this stage, there is probably no need to hire an advisor that manages their investments, as most of their savings are in their current 401k plans. Getting a one-time fee financial plan or hiring an advisor on a retainer is probably best in their case since their investable assets are below $50,000.

The advisor’s expertise should include holistic financial planning for young couples, consolidation of student loan debt and counsel on short-term goals such as buying a house and building a more robust emergency fund.


Mark and Kerry – Married with 1 child, Mark is 34 and Kerry is 32

Do they need a Financial Advisor? Yes, they can definitely use one!

Mark and Kerry could use a great advisor that can help them with their budgeting and debt consolidation. They are in dire need of saving towards an emergency fund before they even get started on student loan repayments or retirement planning. Considering that they have a young child, the advisor can also help them find the appropriate coverage of their term life insurance.

Steve and Jon – Married with 1 kid, Steve is 45 and Jon is 40

Do they need a Financial Advisor? Yes, for investment advice

Steve and Jon have their monthly expenses well under control, but they could use a financial advisor that has strong experience in retirement planning and investments. A great advisor can improve their haphazard portfolio by incorporating their personal risk tolerance and goals to construct a portfolio with realistic return expectations. He or she can also examine the investment fees and investment taxes that they are currently paying to ensure they are being cost and tax efficient. Lastly, a great advisor can educate Steve & Jon on the importance of setting up a Power of Attorney and a Will and can connect them with the right Estate Advisor to do so. 

Dave and Claire – Married with 2 kids, Dave is 55 and Claire is 54

Do they need a Financial Advisor? Yes

Yes, Dave and Claire should look for a financial advisor that has strong experience in retirement planning and investments. A great advisor can help them take a more strategic approach to their investment portfolio by analyzing their risk tolerance and adjusting the risk/return profile of their portfolio. He or she can help them set realistic expectations of the income they will receive when they retire in 10-12 year’s time. The advisor can also educate them on the importance of, and the steps involved in, setting up a proper estate plan.

Parting Thoughts

Perhaps you can relate to one of our profiles? Perhaps not. The point, however, is that no matter what life stage you are in, you can always use some help improving your situation. But that does not mean that everyone should hire a financial advisor!

When your money is more valuable than your time, which tends to be when you are younger and have less income, it might make more sense to educate yourself on how to develop good saving habits, rather than doling out money to hire an expert. As your income rises and your life becomes more complicated (in a good way) with marriage, children, home ownership etc., time becomes a scarce resource and it might make more sense to outsource the task of the household CFO by hiring someone to help you.

To figure out where you stand, we offer Zoe’s free financial wellness score. It assesses whether or not you need any professional help and, if so, discuss the most important areas and who would be best suited to help you. 

We hope this blog series has helped you to better understand financial advice and planning, and that you feel a little more empowered than you did before you read it!

To start from the beginning of the series, click here

If you enjoyed this post, check out How To Interview a Financial Advisor

Disclosure: This blog is not investment advice and should not be relied on for such advice or as a substitute for consultation with professional accounting, tax, legal or financial advisors. The observations of industry trends should not be read as recommendations for stocks or sectors.

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