Most people don’t get financial advisors, not because they believe that they don’t need one but because of the price in hiring one.
We have to admit though, that sometimes, spending a little money now can mean a lot of savings or more money in the future. A solid advice from a financial advisor now can be the investment that you need for your future.
How do you know that this is the right time to get a Financial Advisor?
We have to admit, financial advisors don’t come cheap. It is not because only rich people who have money need them, but also because we are utilizing their financial skills on which, they spent time and effort to hone and sharpen. Not to mention that these people also have to earn a living.
Cost of Financial Advisors
The rates and fees of financial advisors varies.
Financial planners who are being paid as fee-only have rates that range from $1,000 to $2,000. That is just for creating your financial plan. They would have a retainer fee of around $200 monthly, for giving ongoing advice.
Investment advisors who are also fee-only on the other hand, normally would have a fee that is a certain percentage of those assets that you invested. The normal benchmark is around 1%, although depending on the advisor, this could be less or more.
Other advisors get their fees from investment companies and banks. They earn from commissions on those investment products that you buy.
One important thing to remember before hiring an advisor is to ask them how they are paid.
Benefits of hiring your own financial advisor
If you hate worrying about money matters, your advisor can handle of it for you
Most people like money (I mean, who doesn’t?) but some don’t like to manage their own financials. Then it is time to get a financial advisor.
Remember though that for an advisor to accept you as a client, you would need to have investable assets.
Depending on the advisors, some require that you have at least $500,000 to $1 million investable assets, others are okay with $100,000 while others will still accept $50,000. Shop around and compare to find your perfect advisor.
They can provide you with opinions that are third-party and impartial
The most common reason most investors don’t get financial advisors is because they believe that they know how to manage their investments. They don’t feel the need to pay for some advice when they can do it on their own.
One thing you have to bear in mind is: in investing, you can almost never get a fair advantage with the renowed Wall Street. As a human being, your decisions are also not infallible.
A financial advisor may be able to save you from making a bad decision. It is also another set of knowledgeable eyes that may be able to see an opportunity which you might have overlooked. The advisor might still be able to raise your returns and still get you more even after paying the fee.
A financial advisor can help you plan a good financial future
We all have goals and plans on how to save or spend our money, but most people don’t know to create a plan to achieve those goals.
People in their 20s or 30s or those who just finished their college education might still have some student loans to pay, no savings, finding themselves living alone for the first time and struggling to pay for their own expenses, getting married and even planning for retirement.
If an advisor is still within your budget, get one as an investment for your future. If your advisor can help you make good decisions financially, in the future your own investment will be paying for the planner’s fee.
You may be thinking twice about hiring a financial advisor because of the fee, however, if you are investing and want an unbiased opinion, or you don’t want to handle your own financial affairs, or you just need help planning your finances, hiring an advisor may be worthwhile.
Deil D Pecci is a writer and blogger based in Chicago who covers topics on personal finance and entrepreneurship. Deil D Pecci has made Chicago her home along with his wife and children.