Benefits of a Financial Advisor: When to Seek Professional Help and When to Go Solo
It’s no secret that finances can be one of the most stressful elements in life. If you’re an entrepreneur, small business owner, or artist, you may be wondering whether or not to seek the help of a financial advisor. And whether you can even afford one (hint: sometimes you can't afford not to have an advisor by your side!) A good financial advisor can help you make smart decisions with your money and plan for your future. But there are also times when you might not need one. Let’s take a look at when it might be beneficial to seek out a financial advisor and when it might not be necessary.
Reasons You Need a Financial Advisor
1) Financial Literacy
Financial literacy is an important key to feeling secure and content with your money situation. By understanding the basics of personal finance, you can better manage your expenses and save for the future without feeling overwhelmed by any financial concerns. Knowing how to create a budget, handle debt, invest strategically, and identify financial pitfalls can help you make wise decisions with your money so that it’s no longer a source of stress. Having a good understanding of financial concepts and strategies will help you make smart decisions when it comes to pursuing your life goals. Whether it's how to build credit, establishing emergency savings (how much, why, and where to save), navigating business versus personal finances, or coming up with an investment strategy, a financial advisor can help you reach your goals.
TLDR: If money management is stressful, having someone with experience on your side can help alleviate some of that anxiety by helping break down the numbers for easier understanding.
2) Big Life Changes
A big life change such as a job transition, marriage, or the start of a business can be an exciting and rewarding experience—but it also requires careful consideration when it comes to financial planning. If you're facing a major lifestyle shift, bringing in a professional financial advisor can help you make smart decisions to ensure you get the most out of your new situation. From creating budget plans for the next year to understanding tax implications, professionals who have experience in these scenarios can provide expertise that could go beyond what you might be able to work out yourself.
3) Major Purchasing Decisions
If you’re considering making major purchase decisions like buying a house, going back to school, or taking a vacation abroad - again, an experienced financial advisor can help guide you towards better decision making. Financial Advisors can help you make sure that the choices you’re making now are compatible with your long-term goals. For example, advisors can provide guidance on big ticket items like a home or a car, helping you weigh the pros and cons of taking out a loan versus cash purchases. They can also provide advice on how different financing options might impact your credit score. Ultimately, bringing in an experienced financial advisor can simplify the process of major purchase decisions and ensure that the best outcomes for your financial future are being considered.
Reasons You Might Not Need To Hire A Financial Advisor
On the other hand, if you already have experience managing your own finances without much difficulty and you are meeting your financial goals, then hiring an advisor may not be necessary.
You might not need a financial advisor if...
1) ...you are already financially literate & successfully manage your money
If something is functioning properly, then there is no need to make any changes. The same goes for your finances. If you are keeping abreast on tax and social security changes, are successfully accomplishing your financial goals, and feel overall solid on your investment strategy, then you may not need outside help.
2) ...you don't worry about the market
You consider yourself to be a pretty even-tempered individual and you understand that market fluctuations are just part of the landscape. You've set up your investment buckets correctly for long term growth (10+ years) and mid term growth (3-5 years+ ), so that you don't need to worry about short term recessions.
3) ...money doesn't stress you out
Folks who are stressed out about making the right decisions when it comes to money have the most to gain from working with a financial advisor. But if you aren't stressed and all your ducks are in order, then you may not need a financial advisor.
Deciding whether or not to hire a financial advisor depends on several different factors such as budgeting needs, future goals, and also on how comfortable one is with managing their own finances. There is no one-size-fits-all answer here but being aware of what services are available can go a long way towards helping entrepreneurs, small business owners and artists make better decisions about their money management needs.
How to find the right financial advisor for you
If you are considering hiring a financial advisor, the biggest advice I have is to do your research and to find someone with experience working around your situation. The terms 'financial advisor', 'financial planner', 'money coach', and 'financial consultant' all can mean the same thing...but also, the services one individual performs as a 'financial advisor' can be lightyears different from the services another individual provides with the same title.
Some financial advisors make their money earning commissions off of your investment trades. Others earn money selling products. And some, like MM Strategic Advising, provide services where unbiased financial advice and guidance is shared with clients based on their unique situations and life goals. You will want to find the right advisor for you.
Meet Molly, a Financial Advisor who specializes in working with artists, creative entrepreneurs, and small business owners!
Talking about money is hard. I make it easier.
After 20 years working in, managing, and eventually leading multi-million dollar arts organizations, AND the start-up of my own two successful businesses, I decided my passion was found in helping other creatives not only gain financial control, but thrive in the creative arts.
I want to help YOU have the freedom to live a creative life with a solid financial footing so that you can create your best work.
My goal is to help 300 individuals and creative business owners get solid when it comes to money and building the lives they want.
Will you be one of them?