2. You Have Questions About a Specific Financial Situation
If you encounter a complex financial question or are facing a confusing financial situation, a financial advisor can be a huge help. From managing large amounts of student debt to caring for aging parents or special-needs children to owning multiple properties, there are plenty of unique situations that could benefit from a financial advisor’s recommendations.
Ultimately, if you have questions about what to do with your money, it’s a good idea to consider a financial advisor. These experienced professionals know the answers to many financial questions, and they’re well-versed in navigating complex situations.
1. Financial Advisors Can Be Costly
One of the biggest concerns people have about financial advisors is the cost. Hiring a financial expert to give you guidance can come with a high cost – and financial advisors can cost anywhere from a few hundred dollars to a few thousand dollars.
The cost of a financial advisor varies significantly. Some will charge a flat rate of approximately $1,000 to $2,000 for a comprehensive, detailed financial plan. Others, particularly those who work with investments, will charge a percentage based on the amount of money they’re working with. For example, if you’re looking to invest $200,000 an advisor might charge a 1 percent fee annually, or $2,000. Other financial advisors are paid by banks and investment companies, and their costs can be organized differently.
An easy way to think about the cost of a financial advisor is in terms of the money you’re working with. If you don’t have a lot of money and aren’t planning on using a financial advisor’s recommendations to generate earnings, it may not be worth the cost. Even a small fee can decrease your potential gains. However, if you will be earning money either via a higher interest rate or improved investment returns, a financial advisor can be well worth the cost.
If you’re considering hiring a financial advisor, it’s a smart idea to do your research first. You want a financial advisor who’s going to work in your best interests and at an affordable price. Ask friends and family for recommendations. You can also search online for reputable advisors in your area. Make sure to read reviews, check advisors’ experience and education, and vet each potential candidate before making a decision.