When To Hire A Financial Planner and Transform Your Financial Life

Jun 25, 2024
A man and a woman meet across the table from a female financial planner

Understanding when to hire a financial planner is a key step in creating the financial life you desire. 

There are many resources out there to educate yourself about money and how to manage your finances and portfolio successfully. 

You can find a myriad of books, websites, blogs, videos, and other information available to help you educate yourself on what’s best for you and your family. 

Trying to figure out all of this on your own can be overwhelming, yet some people may not feel ready to invest in a financial planner. 

So, with all of the information out there, when is it appropriate to hire a financial planner?


What Is a Financial Planner? 

Financial planners, also known as financial advisors, are professionals who give their clients advice on personal finance, investing, and wealth management. 

When I talk about financial planners, I am talking about Certified Financial Planners, also known as CFPs. (This is the designation I hold.) 

The CFP certification is given by the Certified Financial Planner Board of Standards (CFP Board) which establishes the required exams, qualifications, and continued education required. 


What Do They Help With?

The Certified Financial Planner Board ensures that every financial planner has a base knowledge and skill set across many different financial planning topics as well as interpersonal and leadership skills. 


The profession of financial planning continues to advance in its understanding of what it takes to help clients live rich, fulfilling, meaningful lives. It is about the financial products and services, but it’s about so much more than that. 


Leading financial planners will help you think through and make a plan related to:


  • Cashflow/spending
  • Investing
  • Retirement
  • Taxes
  • Insurance
  • Education funding


They will also help you clarify your goals and values, and help you think about how to align your money decisions with them. 


There are a growing number of specialized financial planners who have advanced training in financial therapy as well. These professionals can help you with all of the financial issues mentioned above, as well as work through painful past experiences related to money and relationships. 


Healthy Love and Money is a leading financial planning and wealth management firm that integrates financial therapy into working with clients. 

When To Hire a Financial Planner 

Many people believe that the right time to hire a financial planner is when you've come into a financial windfall or when you have a change in financial status. 

However, financial planners aren't only for the wealthy. 

A financial planner's skills are versatile and you don't have to be a millionaire to work successfully with one—anyone can benefit from working with a financial planner. 

Here are the key things to consider if you're wondering if it's time to work with a financial advisor.


Things to Consider

Before you hire a financial planner, it’s important to determine what you want to get out of the relationship. Here are a few questions to ask yourself and your spouse before you engage with a financial professional.

How Much Free Time Do I Have? 

Do I have time to do the research myself? Or would my time and energy be better spent hiring someone with expertise to advise me on my financial situation? 

This can be different for everyone. Some people will feel that at this point in their financial lives, it might make more sense to do their own research and make some financial moves without outside advice.

However, many others find that the time and energy involved in becoming educated about the nuances of financial planning requires more time than they're willing to invest now, so hiring a financial planner is a no-brainer. 

 What Questions Do I Have? 

Write a list of the questions you plan to ask your financial planner so you don’t forget them. You can also use these during a discovery call to ensure that the person you want to work with has the expertise you need. Financial planners can help you with many things including: 

  • Putting together a retirement plan
  • Creating an investment strategy
  • Set up investment accounts and make investments for you
  • Assess your current financial situation
  • Develop future financial goals and benchmarks
  • Make a plan to address key points like paying for college, taxes, and retirement
  • Help you understand and make choices about insurance
  • Do estate planning
  • Strategies to pay off loans
  • Ways to generate more income
  • Buying and selling a home

So the questions you have for a financial advisor and the degree of advice you're looking for presently may be the determining factor for when to hire a financial planner. 

It's one thing to make some initial decisions about how you're investing your retirement funds.

However, when you know you need to make a comprehensive financial plan, retirement plan, or estate plan, it's wise to get professional advice to make sure you're making the choices that are in your best interests and optimal for your family's financial future. 


How To Hire a Financial Planner

Just like when you hire a financial therapist, it's essential to hire a financial planner you're comfortable with. This means considering a few things before you get started. 

Only hire a financial planner who has a professional certification so that you can be confident in their knowledge, ethics, and skills. 

Avoid financial planners who push you to make risky financial decisions, make you feel dumb for asking questions, or refuse to explain every detail to you. 

Be prepared to ask questions when evaluating whether to hire a financial planner. This might include things like: 

  • What's your experience with investments? 
  • How long have you been a financial planner? 
  • What type of clients do you normally work with? 
  • How will I access you for questions? 
  • How often can I communicate with you? 
  • How and how often do you communicate with your clients? 
  • What types of services do you provide?
  • What's your investment philosophy? 
  • Do you personally invest in the things that you recommend? 
  • How does your compensation work? 


How to Find Financial Planning Help for Your Unique Situation

Just like in other areas of professional life, there are generalists and specialists. This is not a decision between right and wrong, as it is what will work best for you. 

As an example, my wife is a dentist. There is very specific financial information about the way that a dental practice works and common themes of what makes a dental practice financially successful. That is not knowledge either of us have, so we found it helpful to work with a financial planner who knows the financial paths of dentists. 

This is picking a financial planner based on the type of profession. Taking the time to look for a financial planner that works within your profession likely means that they will have more insight and perspective to offer that is relevant to you. 

Other financial planners may focus on particular life issues or interests. As an example, Healthy Love and Money focuses on couples who need and want help working collaboratively on their finances. 

Or if you are a horse person, there are financial planners who love working with horse people. Recently I met a financial planner who specializes in working with child-free couples.

As you can probably tell there are a lot of different ways to approach looking for a financial planner. 

Take some time to think about what is important and unique about yourself that you would want a financial planner to understand. There are no perfect-fit financial planners, but there are plenty of great financial planners.  

Our family financial planner is great at helping us plan based on our life and household income but is not great at couples communication skills about money. So we use therapy and self-help tools to learn and develop that part of our financial life because we believe that effective and loving financial communication is the foundation of a healthy financial plan. 


How Does Compensation Work?

The last question, in particular, is important to understand.

Possible ways that financial planners are paid include: 

  • Subscription or retainer
  • Commission
  • Percentage of Assets invested (also called assets under management, or AUM)
  • Hourly Rate
  • Fees by Service Type

There are pros and cons to each of the above.

For example, fee-based financial advisors may cost you more upfront and may charge a few thousand dollars a year for a comprehensive financial plan. Other financial advisors make a percentage of the assets you invest, which would be a flat percentage of your total account balance. This is typically 0.25% to 1% per year. 

It's also important to note that some financial advisors will receive incentives or bonuses for different investments they recommend and sell. This might mean things like trips or additional compensation for selling certain life insurance policies, annuities, or mutual funds. There's nothing inherently wrong with bonuses, and they don't mean that the advisor is recommending a bad investment necessarily. However, this needs to be disclosed to clients so that they're aware of how it may be coloring the advice. 

Certified Financial Planners have an ethical obligation to disclose these potential conflicts of interest to you when they recommend an investment. During their certification, a CFP commits to acting as a fiduciary for their clients. This means that they act in the best interest of their clients at all times. Although the CFP board can't guarantee an individual's services, they can sanction a CFP professionally if they fail to uphold this commitment. Regardless of whom you hire, you should always get something in writing that states that they have a fiduciary obligation to you as their client. 


Making the Right Choice for Your Future

Here is the great news: by choosing and working with a financial planner that is right for you, you will likely be three times happier than those who don’t work with a financial planner, according to research published by Herbers and Company.


There is plenty more research that supports the value of working with a financial planner versus not working with a financial planner. Vanguard, one of the largest mutual fund companies, has published research called Advisor Alpha which highlights many additional ways that financial planners add substantial value to their clients' lives well beyond just helping them with managing their investments.   


So if you're a data type of person, the evidence is pretty clear that working with a financial planner is a win. If you are more of the emotional/intuitive type, imagine one of your favorite and most fulfilling relationships and how that helps you in your life. Finding a great financial planner can work similarly. 


If you still have questions about the value of financial planning, I would love to talk with you about how financial planning can help you achieve your goals and live a meaningful life.

I invite you to schedule your free 30-minute discovery call today.

Wishing You Healthy Love and Money,

Ed Coambs



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