By Lynnette Khalfani-Cox, The Money Coach®
Having a financial advisor isn’t something only for rich people, yet far too few adults in the United States take advantage of getting trusted financial help. According to a recent study from the Certified Financial Planner Board of Standards, Inc., only 35% of Americans use a financial advisor.
Often, people mistakenly think that getting good financial advice will be way too expensive and out of their budget. In other instances, some folks let procrastination or their busy schedules interfere with plans to consult a financial professional.
Then there’s the trust factor: some individuals simply don’t trust those working in the financial services industry.
While there are no doubt some bad apples out there, the overwhelming majority of financial advisors, money managers and other financial experts pride themselves on doing their very best to honestly and ethically service their clients’ needs.
So don’t let misconceptions, procrastination, or fear stifle your ability to get ahead financially. And that’s just what a trustworthy, competent financial advisor can help you do.
Here are three reasons you should strongly consider having a financial pro in your corner:
To provide you with specialty knowledge and professional expertise
Do some financial topics confuse you, like the ins and outs of qualifying for a mortgage, or the difference between traditional IRAs and ROTH IRAs? If so, having a financial expert who can clearly explain industry products, services, procedures or strategies can be invaluable.
And don’t be afraid to admit what you don’t know. You’re certainly not alone, since most Americans lack basic personal finance knowledge and don’t have a good handle on financial terminology – mainly because such information isn’t typically taught in schools.
Little wonder, then, that recent research from Guidevine showed that less than half of all adults polled could confidently explain what a 401(k) is or define how concepts like inflation and interest work. A good financial advisor, however, can walk you through each of these and explain how they affect your financial life.
To help you with goal setting and financial planning
More than half of all Americans also feel behind on their retirement savings goals, the CFP Board research shows. If you want to take your finances to the next level, or just ensure that you’re making the right financial moves for the future, here’s another area where a trusted financial expert in your corner can pay huge dividends.
Whether your goal is to secure a comfortable retirement, pay for your newborn child’s college education, or accomplish some other personal or professional milestone, a good financial advisor can aid you in achieving those dreams.
To serve as your accountability partner
Finally, having a financial advisor means you always have an independent, neutral third party who can keep you accountable and help measure your progress.
If you’re lucky, you may also have certain family members or friends to whom you can turn for general financial information and advice. But nothing beats having a trusted expert who knows the details of your circumstances, and can give you professional feedback about your specific situation, your fiscal habits, goals and the options that can bring you the most success.
But what about any fears you may still harbor about finding someone honest and trustworthy?
You always have to do your homework: that means getting recommendations from others who are happy with their advisors, interviewing those experts to make sure they’re a good fit for you, and checking out their professional backgrounds too.
Also, know that consumers have more protections in place, thanks to a new, so-called “fiduciary rule,” which requires financial advisors who work with retirement accounts to adhere to the fiduciary standard, which states that they must act in their clients’ best interests at all times.
So as you can see, having a financial advisor can be just the thing you need to help boost your bottom line.
Extra Credit provides general information to help improve our Member’s financial lives. Every situation is different, so please contact us for guidance on your specific needs. The advice provided in Extra Credit is not intended to serve as a substitute for speaking to a loan representative, financial advisor, or BALANCE counselor who can help tailor a solution for you.
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