What is a financial advisor and do I really need one?

Whether your goals include starting a business or starting a family (or both!), planning for your financial future can be overwhelming. On your own, setting financial goals can feel overwhelming—some of them overlap, collide, or simply seem unmanageable. Sometimes you just need a more structured savings and investment strategy to give you a more comfortable and relaxed mindset. If that sounds like you, a financial advisor may be just what you need.

What is a financial advisor?

A financial advisor is someone who helps you manage your money by creating strategies for financial planning, including managing and building wealth, estate planning, and more. As the name suggests, financial advisors can also provide insight and advice about other financial decisions to help you make the right choices for your circumstances, like the best tax strategies for your income or how to balance your investment portfolios.

“Financial advisor” can also be a catch-all term for professionals—like financial planners, wealth managers, money managers, retirement planners, and many other similar titles—but they generally all mean the same thing: financial guidance for people who want a strategy to achieve some—or many— future monetary goals.

What does a financial advisor do?

As mentioned above, financial advisors can help you with a lot of financial decisions, financial advice, and investment strategies to set yourself up for success. Some of the most common things people turn to financial advisors for help with include planning for future life events like homeownership or paying for college. For example, a financial advisor can help you decide the best way to save up for a down payment or when to open an account for your kid’s schooling. Additionally, a financial advisor can provide insight into retirement, like how much income you may need and how to plan for the cost of long-term care, as well as estate planning.

Planning for life events

Eventually, we all experience some big life event. Some of these can be more easily planned in advance, while other events can pop up without warning. A financial advisor will not only help you navigate the journey, but they’ll also work with you to prioritize your efforts. Let’s say you want to buy your first house, ideally one large enough for your future family. A financial advisor can help you figure out the best way to reach your down payment savings goal, like what accounts will reach your goal faster, or whether you want to pull from your retirement account and what the tax implications would be. Your advisor may also provide insight into planning for unexpected expenses, like setting up an emergency fund.

Maximizing your current assets and building your investment portfolio

Sometimes the help of a financial advisor is about managing the funds you already have. Many people use an advisor’s expertise to invest their savings, manage personal finances, and create a tailored financial plan to put their money to work. With so many investment options, it can be challenging to determine what risk is worth it.

They can help manage an investor’s tax liability, too. A financial advisor who specializes in tax-deferred investment vehicles can help you determine the most advantageous time to take a distribution from your retirement plan or identify beneficial tax-sheltered options.

Regardless of intellect, an investor may lack the appropriate knowledge when it comes to choosing investment options. Trying to balance the relationship between risk and return, your investment portfolio, and your risk tolerance with your time horizon and your financial goals can be tricky. A smart investor seeks out and leverages the guidance of experts, even if they have investment experience. Don’t ever underestimate the value of professional advice.

Retirement planning and tax strategies

It’s never too early to start planning for your retirement, and a financial advisor can help make those dreams come true. Whether you want to buy a boat to sail around the world or buy a large house for your grandkids to visit, your retirement dreams cost money. Discussing those big dreams with your financial advisor can help you better understand your long-term financial needs, including retirement savings and tax planning. Additionally, they can advise on when you can access your retirement funds and Social Security benefits. A financial advisor can also provide some peace of mind for the future. With the rising costs of long-term care, a financial advisor can help you plan for the expense, before you ever need it.

Estate planning

While end-of-life planning may feel morbid, it can help provide comfort during trying times. Having a will in particular can help relieve some of your family’s stress after you pass. Working with a financial advisor, estate planners, and an estate planning attorney can ensure everything is distributed according to your wishes, but also plan out how to divide your assets. Financial advisors can even offer insight into potential future costs you hadn’t considered, like the costs of a family member adopting your pet.

When to choose a financial advisor

Some people think that only wealthy people need financial advisors, but the truth is, anyone can work with an advisor at any stage of life. Your first step should be to determine what financial goals you’re trying to accomplish and whether you need a certified financial planner. You should also keep in mind how much you want to spend. Some financial planners don’t have any upfront fees, while others charge by the hour, a flat fee, or a percentage of assets. Knowing all this can help decide what kind of financial advisor you might want to seek out.

Another big reason to work with a financial advisor is to help get your finances back on track. For some, a few mistakes have left their finances one step away from crashing and burning. If you’re struggling with debt, a consolidation plan might be a wise first step. Financial advisors can develop a plan—not a get-rich-quick fix—where you’ll learn discipline, recognize your spending habits, and be held accountable so you can move toward improved financial health.

When you work through your goals with an advisor who has in-depth knowledge of your financial situation, you can create realistic expectations and learn to plan accordingly. Recommending appropriate investment vehicles and a savings strategy can help guide you through the uncertainty.

While some advisors require a long-term arrangement, there are many who offer free consultations and no-obligation appointments to review your financial plan—or lack thereof. Check out the services offered by your local credit union or bank and set up a meeting. If they don’t give you a gold star and a pat on the back, they’ll be sure to recommend a realistic strategy. Either way, you win!

Key Takeaways:

• A financial advisor provides financial planning services to help you manage existing funds and plan long-term financial goals, like home ownership, retirement, and estate planning.
• You don’t have to be a millionaire to have a financial advisor—anyone can work with an advisor, at any stage of life.
• Some reasons you may work with a financial advisor include planning for large financial decisions, helping pick investments for your portfolio, or getting you back on financial track.

Regardless of where you are in life, it’s never too early to start thinking about your future. A little strategic planning and insightful analysis now can go a long way to helping ensure you meet all your long-term financial goals.

If you’re ready to get started, you can send an email for a no-cost, no-obligation appointment or learn more about Georgia’s Own Investment & Retirement Services here. In addition to a wealth of experience and knowledge, our financial professionals also offer genuine concern for your financial success. We’ll not only come up with a customized plan; we’ll also see it through.