On Whether to Hire a Financial Advisor

Should you hire a financial advisor? To find out the answer, a great question to ask is whether your financial life today is meaningfully improved from where it was 3 years ago.

The tangible checkpoint for this question: review what your net worth is today vs. what your net worth was 3 years ago. Have you increased that net worth significantly, both through saving/investing and paying down debt?

If you don’t know what your net worth is today (much less 3 years ago), it makes sense to sit down with a financial advisor.

Or, if you haven’t really moved the needle much in your financial life in the past 3 years, it makes sense to sit down with a financial advisor. Advisors can be the impetus to set things in motion on a good path for people financially. And it's not just setting you on the right path -- it's helping you stay on that path, through the inevitable twists and turns of life and financial markets. While we all know we should spend less and save more, it’s not easy to pull that off without consistent help, coaching, and accountability.

Other questions to ask yourself:

  • Have I been consistently investing for my future (for retirement or financial independence) over the past several years?
  • Have I been increasing my amount of savings as time progresses? Or has my lifestyle crept up lock-step with my income increases?
  • What percent of my gross income am I saving toward retirement each year? Is that savings percentage high enough, based on my persona lifestyle?
  • Am I saving to pay cash for things like vehicles, vacations, and home remodeling?
  • Am I spending a reasonable amount on things like vehicles, vacations, and home remodeling – relative to my liquid net worth?
  • Am I consciously and deliberately planning for children’s college, weddings, and other goals/dream I have for the future?
  • How will I handle the next recession and bear market?
  • If I die tomorrow, are my spouse and children going to be set for life financially? Or will there be financial worries piled on top of the grieving process?
  • Am I paying off my mortgage (and any other debts) with a purposeful plan? Am I staying on track to hit those targeted payoff dates?
  • How much do I spend every year? Not just the baseline living expenses, but when including all the “one-offs” that inevitably happen each year (braces for the children; a special trip to visit national parks; finishing off the basement; a new vehicle; etc.).

Many more questions could be asked, but this gives you a sense of what a high-quality financial advisor should be talking to you about.

Because The Wealth Group, Austin B. Colby & Associates is independent of Raymond James, the expressed written opinions above are our own and not necessarily reflective of Raymond James’ opinions.