Do You Really Need a Financial Adviser?

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There’s no denying that working with a financial adviser can be beneficial, even for experienced investors. Tiffany Lam-Balfour, an investing spokesperson for NerdWallet, explains that the financial markets are constantly changing, new products emerge daily, and regulations evolve frequently. In such a dynamic landscape, having an adviser by your side can help ensure that you stay updated. Furthermore, even seasoned investors often find it valuable to have someone to bounce ideas off of and assist them in making well-informed investment decisions.

However, it’s important to consider the cost associated with professional advice. Many financial advisers charge a fee based on the amount of money they manage for you. This fee typically ranges from 0.25% to 1% of your assets under management per year. Some advisers also charge hourly fees. While these fees are often negotiable, they can accumulate over time. Although many people find the services provided by financial advisers to be worth the cost, it’s essential to determine if they are necessary for your specific circumstances. Let’s take a look at who likely doesn’t need a financial adviser.

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1. Money Doesn’t Stress You Out Much

According to R.J. Weiss, the founder of the Ways to Wealth personal-finance site, those who constantly feel stressed about money have the most to gain from working with an adviser. Contrary to popular belief, seeking an adviser is not limited to high-net-worth individuals. Nowadays, there are numerous affordable options available. What truly matters is the level of stress someone experiences when dealing with their finances.

You’re Already Managing Your Money Successfully

According to Weiss, our past behaviors can provide insight into whether we require the assistance of a financial advisor. If you have taken the time in the past to educate yourself about personal finance and stay informed about the best ways to manage your money, it is a positive sign that you may be capable of handling it on your own. Weiss further emphasizes the importance of examining the behaviors that have led you to your current financial situation when considering working with an advisor. If you are confident in your ability to manage your money and feel unburdened by stress, a do-it-yourself approach is likely the best option.

You Don’t Panic in a Crisis

If you tend to react to market downturns by immediately withdrawing all your funds and stashing them under your mattress, a financial advisor can offer valuable guidance. Grace S. Yung, a financial planner at Midtown Financial Group, explains that individuals who panic during market fluctuations usually lack a well-thought-out plan and make impulsive decisions. This is where a financial advisor can step in and help you create a comprehensive plan that accounts for market volatility while aligning with your life goals. Additionally, they can provide a calming influence during crises, potentially saving you money in the process.

This story was originally published in 2022.

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