If you're trying to make investments and plan for retirement, a financial adviser can certainly come in handy. Naturally, there are online discount brokers for small investors and all kinds of other modern options that can help you avoid having to pay a fee to a financial advisor. Is it worth paying the fee though? Let's take a look at some tips regarding hiring a financial planner or adviser and see when they would be a good fit.
For starters, people usually don't hire a financial advisor unless they have a significant amount of money they are willing to invest. The reason for this is because the adviser's fee is going to eat into their rate of return. However, think about this for a minute. What if the adviser picks better investments, and it ends up offsetting what you would have paid him or her? After all, that's what you're paying for anyway, to have an adviser better manage your money.
People do make all kinds of mistakes when investing. Think about your experiences and whether or not you have made any mistakes. I know I have, but I have still chosen to be my own financial adviser, becoming your own banker. It's not just about saving yourself from making financial mistakes though. It's also about accountability. Think about the people that go workout at gyms. Maybe you're one of them, but do you use a personal trainer?
If you don't, have you ever heard stories from people who say hiring a personal trainer was the best thing they ever did for fitness? Personal trainers help keep you accountable, and so do financial advisers. They aren't going to make you save, but they are going to make sure your investments are prioritized. they are going to check in on you and manage your finances for you. It really does pay to hire a financial adviser, but you just need to be sure you have enough money for the fee not to eat up your possible returns.
Do you feel like you can manage your money well enough? There are sites and apps that act as financial advisers for customers, putting them into a diversified portfolio of ETF's. You still pay an advisory fee, but it's only a dollar a month or .25 percent of balances over 5,000 dollars. That is a small fee compared to what you might have to pay elsewhere.
In other words, there are traditional financial advisers, and then there are more modern options. It's up to you which one you choose. If I had tons of money, I would use a financial advisor to help me reach my goals and maximize my returns. They certainly know more then I do about investing. What is your level of expertise? If nothing else, you can at least call a financial adviser for a free consultation to see what your options would be moving forward. I would suggest everyone become their own banker.
Posted on 2/28/2017 at 6:14:00 AM