It may be time to get the help you need.
These days, a lot of people are experiencing their share of financial stress. The stock market has been down considerably since the start of the year, and inflation has been driving living costs up to an increasingly unsustainable level. Throw in recession fears, and it's no wonder so many people are losing sleep over their finances.
If you're one of them, it may be time to hire a financial advisor to help ground you. There are many benefits to working with a financial advisor, yet only 35% of Americans have one, according to the most recent Northwestern Mutual 2022 Planning & Progress Study. And if you're among the 65% of people who don't have an advisor, it may be time to get one.
It's not a matter of age or wealth
You might think that you're too young to need a financial advisor, or that you don't make or have enough money to warrant hiring one. But actually, working with a financial advisor from a young age could make it more likely that you'll eventually achieve your goals. That's because your advisor can give you pointers on how to invest your money early on, as opposed to missing out on that opportunity.
And as far as money is concerned, many financial advisors don't have an asset-related minimum. So even if you only earn $60,000 a year and you only have $5,000 in savings to your name, you can still sign up to work with a financial advisor.
What can a financial advisor do for you?
A financial advisor can help you manage your financial concerns and help you work toward your goals simultaneously. Now, it's easy to argue that you can read up on investing strategies and try to do the same thing yourself. But remember, when you hire a financial advisor, you're getting the advice of an objective person who isn't emotionally invested in your success the same way you are. That could actually work to your benefit, because an advisor may be in a position to give you more level-headed advice.
Some of the things a financial advisor can help you with include:
- Building a strong enough emergency fund to meet your needs and give you peace of mind
- Opening a brokerage account and investing in it
- Investing your IRA
- Managing your different financial goals based on their timelines and your priorities (for example, balancing college savings for your kids with your retirement savings)
If you're currently not in the best shape financially -- meaning, you have little money saved, lots of debt, and no major assets of value -- then an advisor could help you improve your financial picture. And that could also change your outlook for the better.
How to find a financial advisor
If you're not sure how to go about finding a financial advisor, your best bet may be to simply ask the people you know for recommendations. If you have a friend, neighbor, or colleague who's pleased with the service they're getting, that's reason enough to give a specific advisor a try.
Of course, you'll want to ask the right questions when vetting advisors, such as:
- What fees do you charge?
- What experience do you have working with clients in a similar boat to mine?
- How often will we meet to review our progress and goals?
But all told, working with an advisor could really work wonders for your financial picture. And so it's worth giving one a shot, especially if money-related concerns have been keeping you up at night.
Alert: our top-rated cash back card now has 0% intro APR until 2025
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee! Click here to read our full review for free and apply in just 2 minutes.
FAQs
Whether they involve tax, estate, or retirement planning, paying off debt, saving for your children's higher education, or some other financial task, you might be just a little bit at sea. This is where a financial advisor can be helpful. Still, only 35% of Americans work with one.
What percentage of Americans use a financial advisor? ›
Americans who work with a financial advisor 2022
In 2022, 35 percent of Americans worked with a financial advisor, while 57 percent said that they didn't have a financial representative. The share of Americans approaching a financial advisor decreased slightly compared to the previous year.
What percentage of millionaires work with a financial advisor? ›
The wealthy also trust and work with financial advisors at a far greater rate. The study found that 70% of millionaires versus 37% of the general population work with a financial advisor.
What percentage is normal for a financial advisor? ›
An AdvisoryHQ study averaged three years of wealth management fees across the U.S. and found that, for a client with $1 million in assets, the average AUM fee was 1.02%. A 1% AUM fee means that a client will pay an annual fee of $10,000 to work with an advisor on an investment portfolio of $1 million.
Are financial advisors worth 1%? ›
But, if you're already working with an advisor, the simplest way to determine whether a 1% fee is reasonable may be to look at what they've helped you accomplish. For example, if they've consistently helped you to earn a 12% return in your portfolio for five years running, then 1% may be a bargain.
Why did I quit being a financial advisor? ›
Lack of work ethic. It takes a lot of hard work and discipline to break into a career as a financial advisor. While many are willing to work hard for a period of time, fewer are willing and able to maintain the high-level work ethic required to survive and thrive as a successful advisor.
Where does Gen Z get financial advice? ›
Between girl math, loud budgeting and cash stuffing, the trendiest financial advice is increasingly born on TikTok. That has helped financial TikTok, also known as FinTok, take off. Now it's one of the most popular sources for financial information, tips and advice, particularly among Generation Z.
What percentage of financial advisors quit? ›
80-90% of financial advisors fail and close their firm within the first three years of business. This means only 10-20% of financial advisors are ultimately successful.
How old is the average financial advisor? ›
According to various studies and publications, the average age of financial advisors is somewhere between 51 and 55 years, with 38% expecting to retire in the next ten years.
Do the wealthy use a financial advisor? ›
If your personal fortune includes millions of dollars and a yacht or two, you may be the ideal candidate for working with a wealth advisor. Wealth advisors are the financial professionals whom affluent individuals often turn to when they need assistance managing their fortunes.
According to the U.S. Bureau of Labor Statistics, the median annual wage for personal financial advisors was $94,170 in May 2021. It means half of the financial advisors earned more than that, and half earned less. One in ten earned less than $47,570, while one in ten made more than $208,000.
What financial advisors do rich people use? ›
A wealth advisor—or wealth manager—is a licensed financial advisor who helps high-net-worth individuals (HNWIs) and families manage their financial wealth. Wealth advisors work with clients to develop investment strategies, plan for retirement and create wealth-building plans.
What is the 80 20 rule for financial advisors? ›
The 80/20 rule retirement emphasizes the importance of focusing on actions that yield the most significant results. When planning for retirement, concentrate on the 20% of your efforts that will have the greatest impact on your financial future.
What does Charles Schwab charge for a financial advisor? ›
Common questions
| Billable Assets | Fee Schedule |
|---|
| First $1 million | 0.80% |
| Next $1 million (more than $1M up to $2M) | 0.75% |
| Next $3 million (more than $2M up to $5M) | 0.70% |
| Assets over $5 million | 0.30% |
Most of my research has shown people saying about 1% is normal. Answer: From a regulatory perspective, it's usually prohibited to ever charge more than 2%, so it's common to see fees range from as low as 0.25% all the way up to 2%, says certified financial planner Taylor Jessee at Impact Financial.
Do I need a financial advisor in my 30s? ›
Whether you should work with a financial advisor in your 30s depends on various factors, including your financial situation, goals, and comfort level with managing your finances. We generally recommend working with a financial advisor when at least one of these applies to you: I am saving $1k/month or more.
Should I get a financial advisor in my 30s? ›
If you haven't started a financial plan yet, there's no better time than now to start. If you do have a plan, revisit it to make sure it's focused on what you want in your 30s. A financial advisor can help you build or revisit your plan.
What type of people use financial advisors? ›
When the use of a personal financial advisor was examined based on income, those who made over $100K were most likely to use wealth management services, with 67% of this income bracket using a financial planner or advisor. For low income earners, those below $50K only used financial advisors 22% of the time.
What percentage of financial advisors are over 50? ›
CFP Professional Demographics
| Age | Number | Percentage |
|---|
| 40-49 | 25,555 | 25.8 % |
| 50-59 | 21,896 | 22.1 % |
| 60-69 | 16,803 | 17.0 % |
| 70-79 | 5,430 | 5.5 % |
4 more rowsApr 1, 2024
