Investment Help: When Do I Need a Financial Advisor?

A significant share of Americans manage their money without any help from a financial professional, but certain life events or set of circumstances may call for investment help from a financial professional. How can you tell when you need professional to help you meet your financial goals?

 The first step toward “personal financial success” is taking stock of the current state of your financial affairs, said Eleanor Blayney, consumer advocate with the Certified Financial Planner Board of Standards. The board awards the CFP certification for qualified professionals and upholds best practice standards for personal financial planning.

An initial review often leads investors to realize they could use some help organizing and managing their finances, said Blayney, in a recent release announcing the board’s latest campaign to promote successful personal financial management.

The need for investment help tends to be most acute at the beginning of the financial planning process and during certain life transitions such as a divorce, death of a spouse or family member, or job loss. According to Blayney, “At these stressful moments, emotions can cloud your judgment.”

Main Street Americans are most inclined to go it alone when it comes to managing their finances, a style known as “self-directed.” An almost equal number seek investment help when dealing with specific life events, such as financing a child’s college education or entering retirement, and are known as event-driven investors, according to Millionaire Corner wealth studies.

Even high net worth investors, the group most likely to work with financial professionals, appear to be predominantly self-directed (24 percent) or event-driven (27 percent), according to our research. But the most successful and sophisticated investor can benefit from investment help, said Blayney.

“Securities markets, financial products and tax laws are constantly and rapidly changing and without a professional who keeps current with these changes, you can easily miss financial opportunities or be exposed to significant risk,” she said.

Ultra High Net Worth Millionaires – those with investable assets of $5 million to $25 million – consult a professional regarding 34 percent of their assets and allow a professional advisor to completely control another 23 percent of their assets, according to our research. These wealthy investors most commonly report receiving advice on selecting individual stocks and bonds, diversifying their portfolio and developing an investment plan. They also consult with advisors on tax strategies, retirement planning and cash flow, along with numerous other issues.

Investors at the beginning of the financial planning process may also feel the need for investment help, said Blayney. A financial planner can help launch the planning process by evaluating income, debt, tax status, insurance needs and retirement planning as part of a complete review of an investor’s financial circumstances.

“You may, for instance, know you need to save more, but are uncertain as to how or where to begin,” said Blayney. Millionaire Corner research shows that Ultra High Net Worth investors are most likely to seek financial help from a full-service broker, accountant or independent financial planner.

If you feel you may need some investment help use Millionaire Corner's Find a Financial Advisor.