Not everyone needs a financial advisor.
If your finances are relatively straightforward, you enjoy managing them yourself and you feel confident about the decisions you’re making, you may be perfectly comfortable handling things on your own.
But finances tend to become more complicated as life does.
A new job brings a different retirement plan. A growing investment portfolio creates tax considerations. Retirement gets close enough that you need to turn savings into income. Parents age. Children leave home. An inheritance arrives. Suddenly, decisions that once seemed separate begin affecting one another.
So how do you know when it might make sense to work with a financial advisor?
Here are eight signs it may be worth having a conversation.
1. You Have Money in a Lot of Different Places
A 401(k) at your current employer.
Another one from a previous job.
An IRA.
A brokerage account.
Savings at the bank.
Maybe company stock, a pension or other investments you've accumulated along the way.
Having multiple accounts isn't necessarily a problem. The bigger question is whether they are working together.
As your finances grow, it becomes more important to understand your overall investment allocation, risk exposure, taxes and how each account fits into your larger financial plan.
Looking at each account individually can only tell you so much.
2. You're Making More Money, but Your Financial Decisions Are Getting Harder
Higher income doesn't automatically make financial planning easier.
In fact, it can create more choices.
Should you increase your 401(k) contributions? Use a Roth IRA? Invest additional money in a taxable brokerage account? Pay down the mortgage? Keep more cash? Adjust tax withholding?
There may not be one universally correct answer.
A financial advisor can help evaluate those decisions together instead of treating each one as a separate question.
3. You're Within 5 to 10 Years of Retirement
The years immediately before retirement can involve some of the most important financial decisions you'll make.
At this point, the question begins to shift from: “Am I saving enough?”
To: “How is all of this actually going to work?”
You may need to think about when to claim Social Security, how a pension fits into your income, which accounts to withdraw from first, health insurance or Medicare, taxes, investment risk and how much you can reasonably spend.
Retirement planning isn't only about reaching a certain account balance. It's about coordinating the different pieces that will eventually replace your paycheck.
4. Taxes Are Starting to Affect More of Your Financial Decisions
Taxes and financial planning often overlap.
Selling an investment can create capital gains.
Retirement account withdrawals may increase taxable income.
A Roth conversion could affect your taxes today while potentially changing them later.
Investment income can affect the taxation of Social Security benefits and, for some retirees, Medicare premiums.
This is where looking at investments without considering taxes can leave out an important part of the picture.
Financial advisors don't replace your CPA or tax professional. But thoughtful financial planning can help identify decisions that may have tax consequences and coordinate with your other professionals when appropriate.
5. You've Experienced a Major Life Change
Sometimes the clearest reason to seek financial advice isn't your account balance. It's that life changed.
That might include:
Getting married
Getting divorced
Losing a spouse
Receiving an inheritance
Selling a business
Changing careers
Becoming an empty nester
Preparing for retirement
Caring for an aging parent
Major life changes often create several financial decisions at the same time.
And they don't always happen when you feel ready to make them.
Having someone help organize the decisions, identify what needs attention now and determine what can wait can be valuable in itself.
6. You Have Investments, but You're Not Sure Why You Own Them
It's possible to build a sizable investment portfolio over many years without ever creating an actual investment strategy.
You contributed to a 401(k) because you were supposed to.
You opened an IRA.
You bought a few investments someone recommended.
You selected funds based on past performance.
Years later, you may have plenty of investments but no clear understanding of how they work together.
A portfolio should reflect more than what's performing well right now. Your investments can be considered in the context of your goals, time horizon, comfort with risk, income needs and other financial resources.
If you can't explain the role your investments play in your financial plan, it may be time for a closer look.
7. You're Asking the Same Financial Questions Over and Over
Should I retire this year or work another year?
Can we afford the vacation home?
Should I pay off the mortgage?
Are we keeping too much in cash?
When should I take Social Security?
Can we give money to our kids without affecting our own plans?
Sometimes people don't need more financial information.
They need a way to apply the information to their own lives.
Search engines, calculators, podcasts and AI can provide an enormous amount of useful financial information. What they can't always tell you is how one decision interacts with everything else happening in your financial life.
That's often where financial planning becomes most useful.
8. You Simply Don't Want to Manage Everything Yourself Anymore
You don't have to be confused about money to work with a financial advisor.
You might understand investing perfectly well.
You may be capable of managing your own portfolio.
You may even enjoy learning about financial planning.
But eventually, you may decide you don't want your free time spent reviewing investments, monitoring tax opportunities, keeping track of financial deadlines and researching every decision.
Delegating doesn't mean you stop being involved.
A good financial planning relationship should help you understand the decisions being made while giving you someone else to help manage the details.
How Much Money Do You Need Before Working With a Financial Advisor?
There isn't one dollar amount at which everyone suddenly needs financial advice.
Complexity can matter just as much as net worth.
Someone with relatively modest assets but a pension, stock compensation and an upcoming retirement may have several decisions to coordinate. Someone with significantly more invested may have a relatively simple financial situation they are comfortable managing independently.
Instead of asking only, “Do I have enough money for a financial advisor?” it may be more useful to ask:
“Are my financial decisions becoming important or complicated enough that professional guidance would be valuable to me?”
What Should You Look for in a Financial Advisor?
If you decide it's time to talk with an advisor, understand who you're hiring and how the relationship works.
A few questions can be helpful:
Are you a fiduciary?
How are you compensated?
Do you receive commissions for selling financial products?
What type of clients do you typically work with?
What does financial planning include?
Who will I actually work with?
How often will we meet?
How do you coordinate investment, retirement, tax and estate planning considerations?
You should also understand the difference between fee-only, fee-based and commission-based compensation structures.
The goal isn't simply to find someone who manages investments. It's to understand what kind of advice you're receiving and how the advisor fits into your financial life.
You Don't Have to Wait Until Something Is Wrong
One misconception about financial planning is that you seek help because you've made a mistake.
Often, it's the opposite.
People begin working with an advisor because things are going well, but their financial lives have reached a point where there is more to coordinate.
You may have accumulated meaningful savings. Your career may have progressed. Retirement may be getting closer. Your family may have more people and priorities to consider.
The question isn't necessarily, “Can I do this myself?”
You probably can.
The better question may be: “Do I still want to do all of this myself?”
At LincolnBridge Financial Planning, we work with individuals and families to bring investments, retirement, tax strategies and estate considerations into one coordinated financial plan. As an independent, fee-only fiduciary firm serving North Central Illinois, our role is to help you understand your options and make informed decisions based on your financial life and goals.
If you're wondering whether working with a financial advisor makes sense for you, a conversation can be a good place to start.
Frequently Asked Questions
Is it worth having a financial advisor?
It depends on your financial situation and what you're looking for. Some people value an advisor for investment management, while others seek help coordinating retirement, taxes, estate planning and major financial decisions. The potential value often increases as a person's financial life becomes more complex.
At what point should I get a financial advisor?
There isn't one specific age or account balance. People often seek financial advice when approaching retirement, receiving an inheritance, changing jobs, accumulating multiple investment accounts or facing financial decisions they no longer want to manage alone.
How much money should I have before seeing a financial advisor?
There is no universal minimum. Individual advisory firms may establish their own requirements, but the need for financial planning can depend on complexity and the decisions you're facing, not simply your net worth.
What does a financial advisor actually do?
Services vary by advisor. Financial planning may include investment management, retirement planning, tax-aware strategies, Social Security planning, estate and legacy considerations, insurance analysis and guidance around major financial decisions.
What's the difference between a financial advisor and a fiduciary?
“Financial advisor” is a broad term. A fiduciary is required to act in a client's best interest when providing fiduciary advice. When interviewing an advisor, ask whether they act as a fiduciary and how they are compensated.
Can I manage my finances myself?
Absolutely. Many people successfully manage their own finances. Working with an advisor may become useful when your finances become more complex, you want another perspective or you simply prefer to delegate some of the ongoing work.