In general, it’s best to hire a financial advisor when a financial situation feels too complex to navigate. There are also several scenarios when it may be a smart idea. The following are some questions to consider when you’re wondering when to hire a financial advisor.
Am I close to retiring?
If you’re within a few years of retirement, it may be time to seek the advice of a financial advisor. Managing an investment portfolio in retirement tends to be different from when you are working.
Since you’re going to be taking distributions (making withdrawals) from these accounts, you’ll want to make sure your portfolio has the right balance of risk and return for you.
Working with a financial advisor could mean looking at various portfolio scenarios and coming up with a realistic plan on how to proceed. That way, you can increase your chances of earning a steady stream of returns from your portfolio while safeguarding the money you’ve already invested.
Is my tax situation complicated?
For most people, using DIY solutions like tax software may be enough. However, there may be some situations where it may require more guidance, like if:
- you recently purchased a small business
- you received an inheritance
- you need to file taxes for a relative that passed away
- you worked overseas for part of the year
- you want to lower your taxable income
A financial advisor can offer services like showing you other ways to invest beyond your employer-sponsored plan, or looking over your tax paperwork and referring you to the right tax professional as needed.
Did I go through a major life transition?
Life events like marriage, divorce, or having children can affect your finances, whether that’s changing your budgeting strategy, or updating your retirement accounts.
Other major changes include getting a large inheritance or finding out that you’ll most likely need to help manage your elderly parent’s finances. Both may require some professional guidance, especially if you feel too overwhelmed or tend to make decisions based on emotion.
It’s never too early to start saving for future goals. Save when you spend by taking advantage of Automatic Savings features with a Chime high-yield savings account.2
Do I need help diversifying my portfolio?
Diversifying your investment portfolio can help avoid volatility and prevent your investments from fluctuating too much.
Working with a financial advisor can help you align your current portfolio with your goals. For example, if your portfolio is heavy on industries that are riskier, and your goal is to have more stability, your financial advisor can help move some investments so that your portfolio is at less risk of major dips.
