When Do I Need a Financial Advisor?

Summary: As your life and finances change, so do your goals and responsibilities. This article explores life-changing situations and events when turning to a trusted financial advisor can be indispensable.

“Do I need a financial advisor?” If you’re asking this question, it may be a sign that professional guidance could benefit you. There are certain aspects of basic investing and long-term tax planning strategies you can learn and implement on your own. But as your financial life gets more complicated, it’s typically a good idea to call in a professional.

What do financial advisors do?

Financial advisors can provide an array of support, including helping you to:

• Create a long-term financial plan
• Choose the right investment
• Select the right insurance to help protect you and your loved ones
• Figure out tax strategies
• Work with your attorney to develop a plan for your estate.

A financial advisor can also help you design a holistic financial plan encompassing several or all of these different services. Instead of just focusing on investments and insurance like traditional financial planning does, a holistic approach considers all aspects of your finances, such as taxes, legal issues, and family situations.

When you may need a financial advisor

When faced with certain life situations or major financial decisions, your need for a financial advisor may outweigh your desire to follow the DIY-approach. Here are a few of those situations.

1. When you don’t have clear financial goals.

While you certainly can do it yourself in the early stages, consider hiring a financial professional to help get you started. This can include helping you to define and quantify financial goals for retirement or other life benchmarks. Working with a financial professional can help you define your goals, establish your timelines and determine the best products and strategies to help you reach your goals

2. When market volatility causes anxiety

The stock market inevitably goes up and down over time, but historically, it has always moved at an upward trajectory over the long term. When the stock market goes down, it’s easy to panic. Emotions can take over, and you may make decisions you regret later. Past performance does not guarantee future results.

This is a sign you may need a financial advisor; someone trained to be calm in moments of uncertainty and who can help you keep that same composure so you don’t make financial moves that are in opposition to your long-term strategy.

3. When you’re going through a major life change

Whether you’re getting married, changing careers, welcoming a child or mourning the loss of a parent, big life changes often mean significant financial changes. Nobody’s an expert at everything, especially when facing unfamiliar situations; seeking professional financial guidance during such times is often wise.

4. When your tax situation changes

Significant life changes may require revisions to your tax plan and financial strategy. If your income goes up or down with a raise or a job loss, or you suddenly have new dependents on your tax return, it may be a good time to meet with a professional to explore how these changes affect your tax planning.

5. When you’re shopping for insurance

Insurance can be complicated—especially life insurance. When you are shopping for a policy, a financial advisor can help you decide what policy options are available and which one is best for you and your family. As you age and face long-term care or critical illness needs, you may require a financial advisor for disability planning and/or to design a financial plan that considers your situation.

6. When you need help with estate planning

When preparing a will and/or trust documents, you typically need the help of two professionals: an experienced estate attorney and a financial advisor. If you are taking care of an aging parent or loved one, you can also lean on a financialadvisor who is experienced in estate planning.

7. If your family experiences a disability

The birth of a child is a major life-changing event and a great opportunity to meet with a financial advisor. In the event you or your child is diagnosed with a disability, a financial advisor would be a critical resource as you navigate programs like Medicaid, Medicare, and Social Security.

8. As you’re nearing retirement

If you are closing in on your big retirement, now is the right time to meet with a financial advisor. A financial professional can help you manage retirement planning decisions and track your progress. On a practical level, the advisor can work with you to determine how much to draw from your investments every year, the interplay between your investments and Social Security, and any tax implications.

No need to wait for a major event

Seeking a financial advisor doesn’t have to begin with any of these events. It can start now. You don’t need to have significant investment assets or a complex financial situation to consult a financial advisor. Enlisting the services of a professional who can help you put your financial house in order is always a great idea.

Whether it’s marriage, divorce, welcoming a child into the world, retiring early or planning for your parents’ departure, life events almost always change the financial plan. When you need a financial advisor, we’re here to help.

Frequently Asked Questions

Q1: How do I know if I need a financial advisor or accountant?

Financial advisors excel at big-picture tax planning, such as choosing the best tax-advantaged retirement account for your situation. Accountants are usually more helpful during tax filing or when strategically planning for tax optimization. Sometimes, financial advisors enlist accountants to help them develop comprehensive long-term financial and tax plans.

Q2: Do I need a financial advisor for my IRA?

Opening and investing in an Individual Retirement Account or IRA doesn’t require a financial advisor. However, if you’re unsure how your IRA fits into your long-term financial plan, or if a significant life event alters your goals, consulting a financial advisor might be beneficial.

Q3: How do I find a financial advisor I can trust?

First, look up their current status with their certifying board and make sure they have a fiduciary responsibility towards you. You can review disciplinary records for financial advisors at adviserinfo.sec.gov and records for brokers at brokercheck.finra.org. Next, ensure they offer a clear, understandable fee structure. Finally, interview several advisors to find one whose communication style suits you.

Disclosures:

Registered representatives offer securities through Mutual of Omaha Investor Services, Inc., Member FINRA/SIPC. Investment advisor representatives offer advisory services through Mutual of Omaha Investor Services, Inc. Not all Mutual of Omaha Advisors representatives are financial advisors. Mutual of Omaha Advisors is a division of Mutual of Omaha Insurance Company.

Mutual of Omaha and its representatives do not provide tax and legal advice, and the information provided herein is general in nature and should not be considered tax and legal advice. Consult a qualified professional regarding your specific situation.

*Asset Allocation seeks to maximize the performance of your investment portfolio using diversification and disciplined investing. Diversification can be thought of as spreading your investment dollars into various asset classes to add balance to your portfolio. Although using an asset allocation methodology does not guarantee greater returns or against the risk of loss in a declining market, it may be able to reduce the volatility of your portfolio.

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