Is it Time for a Financial Advisor? Ask Yourself These 5 Questions First

If you want to avoid outliving your money, investing can be a great way to continue to grow your nest egg as you approach — and enter — your retirement years. While there may be many robo-advisors out there that will do the investing for you, the one-on-one, hands-on approach and personal advice and guidance you get when working with a real-life financial advisor oftentimes will offer better insight and clarity into the investment process.

According to a recent survey, financial advisors have become more important over the course of the past decade.¹ An increasing lifespan could be one of the many reasons people are more interested in professional help when it comes to effectively managing their money. The survey found that “consumer use of financial advisors has increased from 28 percent in 2010 to 40 percent in 2015,”¹ signifying a potential shift in attitude toward financial professionals. While approximately 30 percent of households have a financial advisor, investors who are nearing retirement are more likely to hire one.² About 40 percent of individuals in their 60s have a financial advisor.²

From your needs and objectives to your risk tolerance and timeframe, there are a variety of factors your financial advisor will consider when designing your customized investment strategy. However, before you hire a financial advisor to help you grow your assets, it’s important to ask yourself these five key questions first.

1. How Complex Are My Finances?

While a financial advisor can be helpful in any situation, hiring one is usually more necessary when you have complex issues and questions to sort out. Things like inherited stock, investing the assets of your small business, or retirement distribution strategies require more in-depth insight. Even if you’re simply looking for straightforward advice that you can apply on your own, a financial advisor could save you some time and money in the long-run. If you’re about to experience a transition — such as the birth of a child, a divorce, or retirement — teaming up with a financial advisor can help guide your decisions as you enter new financial territory.

2. How Much Can I Invest?

Before deciding to engage with a financial advisor it’s important to first consider how much money you have to invest. Some financial advisory firms require you to have a minimum amount of "assets under management" (also referred to as AUM) before they will take you on as a client. Fortunately, with Escient Financial there are no minimum amounts of assets that you need to be a client.

3. Do I Need Additional Financial Help?

When looking for someone who can help you invest your money, you can either hire someone who purely specializes in investment management, or you can find someone who offers comprehensive financial planning services. Because comprehensive financial planning involves investing, some may argue that finding a professional who provides this comprehensive style will give you more value for your money. This is the kind of service that Escient Financial provides - full comprehensive financial planning and personalized investment management if you want or need it..

4. What Are My Goals?

This may seem like an obvious question, but some people overlook this critical question and end up in an undesirable situation. Not having set goals is like hopping in the car and just driving with no destination in mind and no sense of direction. The best way to determine how much to invest where t invest, and how to invest is to figure out your goals first. Sometimes your goals may not be obvious or even seem like goals. A financial advisor who has a focus on financial planning can help you determine and set your goals, and then develop a strategy for achieving them with your investments.

5. How Much Am I Willing to Pay?

In addition to the potential of losing money in the stock market, you will also incur fees from your financial advisor. Some advisors charge a percentage of your assets under management (AUM), so it’s important to consider how much you’re willing to pay someone to professionally manage your investments. Some people would rather save the money and do it themselves. However, a financial advisor is valuable in that they can educate you, as well as apply their knowledge, to help you make smarter investment decisions. At the end of the day, a financial advisor is an investment in itself, so you’ll want to think carefully about what you’re willing to pay for the value they can provide you.

Once you have the answers to all of these questions, or if you need help understanding and answering them, feel free to reach out to Escient Financial for a complimentary introductory meeting.