When Should You Hire a Financial Planner?

If you’re like most people, you think that financial planners are for rich people or for when you have your “financial act” together. Does that sound familiar? It’s probably the most common feedback I hear from prospective clients, and honestly couldn’t be further from the truth. 

The reality is that everyone could benefit from working with a financial planner at some point in their lives. I’ll outline a few reasons why below.

1. To help you get out of your own way

This is probably the most important value-add for financial planners. In my experience, every one of us has money hangups. Whether those be about feelings of scarcity and money; feeling hopelessly clueless about financial matters(really common for millennials in particular); shame over past money mistakes(more on that here); or despair at not having saved “enough.” All of these money hangups translate into less than optimal financial habits or behaviors. They may be causing you to act in ways that are detrimental to your financial health. How many of us have gone on a #yolo shopping spree after checking our bank balance and finding it woefully small? 

A good financial planner will help you identify your money hangups, and craft a plan for accumulating wealth and achieving your goals despite those natural inclinations. They will serve as your “financial BFF,” sounding board and accountability partner. There should be no judgment, just honest, unbiased feedback and advice.

2. You feel hopelessly overwhelmed by all the information out there

“Buy this stock! It’s the next Amazon!”

“Get out of the market!” 

“Social Security is bankrupt!”

“Roth is always the way to go!”

“No debt is the only way!”

The internet is a virtual barrage of financial tips, strategies, and recommendations. How can you know what is right for you? How can you know whether this source is trustworthy and truly has your best interests at heart? How can you know you’re not missing some valuable piece of information that negates all your hard work?

The reality is that without a knowledgeable hand to guide you, it is very easy to make the wrong step in your finances or miss a crucial piece of the puzzle.

3. You’re too busy to focus on your finances

This particularly applies to my Foreign Service clients. When you have to plan on finding a new job every 2-3 years, moving your entire family across the world, enrolling your kids in a new school at every post, etc. there is very little time left to double-check that you’re maximizing your TSP before year-end, figure out whether you should contribute to a Roth IRA or Traditional IRA or decide whether you should pay down your mortgage or invest. Oftentimes, FSO’s neglect their finances and are left with the lingering feeling that they haven’t paid enough attention to them. Why continue with that low lying stress when you could hire someone to think about all those things for you?

4. You can’t possibly know it all

I have had the great honor of working with extraordinarily talented and intelligent clients (hello all you Foreign Service Officers!). My clients have been award-winning authors, physicists, worked at NASA and for the CIA as computer programmers. Every single one has never failed to amaze me with their knowledge, innovation or smarts. However, the reality is that unless you are a financial planner by trade or personal finances are a hobby of yours, you likely don’t spend nearly enough time thinking about personal finances to make you as effective as a seasoned financial planner.

In his book Outliers, Malcolm Gladwell proposes that you need to spend 10,000 hours doing something to be truly good at it. How many of us can say we have spent any significant amount of time doing anything besides our particular job or our favorite pastime?

It is your financial planner’s job to consider strategies to optimize finances, analyze tax law changes and how they may affect clients, think through college savings strategies, etc. The reality is it would take the layperson significantly longer to discover, research, and craft a coherent financial plan than it would a professional. Most people don’t try to be their own doctors, so why would you do the same for your finances?

At the end of the day, the decision to hire a financial planner is a personal one. However, I think a good financial planner is worth their weight in gold if they can help you get and keep your finances in order and provide you with a feeling of financial peace. 

Check out this blog post, and this page if you want to learn more about the financial planning process.

Financial Planning




When Should You Hire a Financial Planner?

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