There is no specific timeline to help guide your journey to financial well-being. As such, there are no hard and fast rules that will determine the best time to engage a financial professional to help manage your assets.
Many people feel that they can manage their investment portfolios on their own in spite of a lack of overall financial literacy or training. As your nest egg grows and your situation becomes more complicated though, you may find yourself in need of an all-encompassing financial game plan. Finding an advisor with whom you can develop a long-term relationship can go a long way toward meeting your financial goals.
Under what circumstances should you consider contacting a financial advisor?
Certain milestones in our lives can act as a trigger for seeking out financial advice. Marriage or divorce would be an example. Reviewing options on how to fund your newborn child’s education would be another.
A death in the family is traumatic enough without the added burden of sorting out family monetary matters. For those with a family business, having a well-structured succession plan already in place with an advisor can help ensure the next generation is just as prosperous.
A financial advisor can help with common sense answers and realistic strategies to what might seem like overwhelming difficulties when your life goes through momentous change.
Significant Increase in Assets
For those whose employment compensation is based on achieving certain sales levels or other strategic criteria, a large bonus may be enough to trigger the need to seek financial advice from a professional.
What happens when you realize that your deceased Uncle Harry included you in his will and you have inherited a large sum of money? A perfectly good time to reach out for advice.
Change in Size or Complexity of Your Portfolio
You’ve been faithfully participating in your employer’s 401(k) plan for decades and realize that you’ve managed to build a considerable sum for your future family needs or retirement. Do you have the right mix of investments? Are you taking too much or too little risk? Would you even know the difference? You should also realize that in order to safeguard those assets, it’s probably time to engage that market professional.
Nearing Retirement Age
Making the transition into retirement can be stressful for many, especially if you feel you are unprepared from a monetary standpoint. When is the best time to retire? How will your income needs be supported? How do we negotiate the Social Security maze? How does Medicare work?
The proper guidance for these and other questions about your financial future should not be left to the answers your next-door neighbor gave you. You need to have a professionally developed plan that an investment advisor can deliver.
How Do Advisor Fees Work?
There are various ways that investment advisors are compensated. While it is primarily a function of the level of service being provided, the overall approach the advisor takes differentiates one from the next.
Some advisors collect a straight commission based on the type of investment vehicle they are offering. So many will have a fee schedule that applies to specific financial products like mutual funds, annuities or exchange traded funds.
Still others charge a fee based on the amount of money they have been given to manage or they may charge an hourly fee or even a flat retainer for their services.
It is important to understand the difference between types of advisors and become comfortable with that approach. This will go a long way towards achieving that level of trust in an advisor that is needed for a beneficial relationship. (We cover 4 simple questions to ask before hiring a financial advisor in our guide here.)
Fiduciary Financial Advisors
As fiduciaries, Registered Investment Advisors (RIA) are legally required by the SEC to act only in their clients’ best interest, not their own. This is known as the fiduciary standard and it precludes advisors from collecting commissions based on specific investment vehicles.
As a Registered Investment Adviser (RIA), our Carnegie Investment Counsel mission is to thoroughly understand your needs to increase your peace of mind. Our advisors are compensated either through an annual fee or as a percentage of assets under management, in other words we are fee-only financial advisors. This arrangement provides transparency and leads to less chance of a conflict of interest. An RIA has a focus on clients, not on the sale of certain products or investments. This transparency may make hiring a fee-only financial advisor the clearest choice for many.
Knowing When To Hire a Financial Advisor
Financial advisors can address the many facets of your specific economic situation. They can make recommendations on things like life insurance, estate planning and retirement income planning. They will help you develop a detailed plan that will allow you to effectively pursue your financial goals.
If you are experiencing any of the situations covered in this article, it may be the perfect time to hire a financial advisor. Or at the very least, book a no-obligation one-on-one individual consultation with our team.
Looking for a Financial Advisor for You?
If you are currently looking for help with financial planning, contact us. We are happy to schedule an introductory meeting at your convenience.
Carnegie Investment Counsel (“Carnegie”) is a registered investment adviser with the United States Securities and Exchange Commission (“SEC”). Any reference to or use of the terms “registered investment adviser” or “registered,” does not imply that Carnegie or any person associated with Carnegie has achieved a certain level of skill or training. Carnegie does not provide legal, insurance or tax services.