But when exactly is the right time to hire a financial planner? I don’t think anyone should hire a financial planner until they can answer two questions:
- What do you want from the relationship?
- Are you ready to take advice?
What do you want from the relationship? This may seem like a really basic question, but it really isn’t.
Do you want an advisor who will beat the market every year?
If this is your real motivation, forget about it! It’s impossible. No financial advisor or planner can beat the market year in year out. There are investment strategies that work, but nothing works all the time. So, don’t hire an advisor based simply on investment performance. They will likely let you down at some point.
Are you looking to hire an advisor because you need a financial plan?
If so, you need more than an “investment manager”. Hire someone who can look at your situation objectively and has been trained in all aspects of personal finance. Also, hire someone who doesn't receive their compensation based on the recommendations they make. Financial Planning is a process, not an event. If you need a financial plan, only hire a Certified Financial Planner (CFP).
Great Reasons to Hire a Financial Planner
First, you can admit that you don’t know everything and you need direction.
Second, you need financial discipline or someone to hold you accountable. In other words, you need to be saved from yourself. This may sound crazy but for those of you who really understand what I’m talking about, you know it’s true.
Most of us are our own worst enemy when it comes to investing or spending. And just having someone hold you accountable is worth many times the price you will pay. Think about the last stupid investment you made. What if you could have avoided it? Think about the all the money you wasted last year because nobody scrutinized your spending. How much would you have saved if you had someone to help you stick to a budget?
But… Are you ready to take advice?
Be honest with yourself. If you’re not willing to take direction, don’t bother hiring a financial planner. You’ll spend a lot of time and money for nothing.
For more about my unique Financial Planning process called "Financial Life Coaching", go to www.jasonWqualls.com