When to Hire a Financial Advisor

Written By Mason Stockham

Matt Stockham

Managing personal finances can be overwhelming, especially as wealth grows and financial decisions become more complex. While some individuals prefer a DIY approach, others benefit from professional guidance to optimize investments, minimize taxes, and plan for the future.

But how do you know when it’s time to hire a financial advisor? And what should you look for to ensure you’re choosing the right one?

Signs You Could Benefit from a Financial Advisor

While anyone can benefit from financial advice, certain life events and financial milestones make professional guidance especially valuable.

1. You Have a High Income but Lack a Clear Wealth-Building Strategy

Earning a substantial income is an opportunity—but without a strategy, lifestyle creep and poor investment decisions can erode wealth. A financial advisor can help structure a plan that balances spending, saving, and investing for long-term financial security.

2. You’re Nearing Retirement and Need a Plan

As retirement approaches, questions about income distribution, Social Security, required minimum distributions (RMDs), and tax efficiency become critical. An advisor can help create a plan to ensure a comfortable retirement without running out of money.

3. You’ve Experienced a Major Life Change

Big life events often come with significant financial implications, including:

  • Getting married or divorced

  • Having children

  • Inheriting wealth

  • Selling a business

  • Receiving a financial windfall

A financial advisor can guide you through these transitions, helping you make informed decisions about investments, estate planning, and tax strategies.

4. You Own a Business or Have Complex Investments

Business owners and high-net-worth individuals often have more complex financial needs, such as tax planning, succession strategies, and diversified investment portfolios. A skilled advisor can help navigate these complexities while ensuring assets are managed efficiently.

5. You’re Unsure About Your Investment Strategy

DIY investing can work for some, but it often leads to costly mistakes due to emotional decision-making or lack of diversification. If you’re unsure whether your portfolio aligns with your goals and risk tolerance, an advisor can provide a tailored strategy designed for long-term success.

6. You Want to Minimize Taxes and Maximize Wealth

Tax efficiency can play a crucial role in wealth preservation. A financial advisor could help implement strategies such as:

  • Tax-loss harvesting can offset investment gains

  • Roth conversions could help optimize retirement savings

  • Charitable giving strategies often reduce taxable income

  • Estate planning techniques can minimize tax burdens for heirs

7. You Simply Don’t Have the Time or Interest in Managing Your Finances

Many professionals and business owners are too busy to dedicate time to investment research, tax strategies, and financial planning. If managing your finances feels like a burden, outsourcing to a trusted advisor can provide peace of mind while ensuring your money is working efficiently.

Can Financial Advisors Really Add Value?

Some individuals hesitate to hire a financial advisor due to concerns about fees. However, research suggests that professional advice can significantly increase net returns—even after accounting for advisory fees.

A Vanguard study found that investors who work with a financial advisor earn, on average, 3% more annually than those who manage their investments alone (Vanguard, 2023). This additional return comes from:

  • Behavioral coaching can prevent emotional investing mistakes

  • Tax-efficient investing strategies

  • Portfolio rebalancing and risk management

  • Withdrawal strategies in retirement

Even a small increase in annual returns can have a major impact on long-term wealth accumulation.

What to Look for in a Financial Advisor

Choosing the right financial advisor is essential for building a strong and trusting relationship. Here are key factors to consider:

1. Fiduciary vs. Non-Fiduciary Advisors

A fiduciary advisor is legally obligated to act in your best interest, whereas a non-fiduciary may recommend products that pay commissions or have hidden fees. Prioritize working with a fiduciary to ensure unbiased, transparent advice.

2. Fee Structure: How Advisors Get Paid

Advisors are compensated in different ways, which can impact the type of advice you receive. Common fee structures include:

  • Fee-only: Advisors charge a flat fee, hourly rate, or percentage of assets under management (AUM). This model eliminates conflicts of interest.

  • Commission-based: Advisors earn commissions from selling financial products, which can create biased recommendations.

  • Fee-based: A hybrid model where advisors charge fees but can also earn commissions.

For transparency and alignment of interests, a fee-only model is often preferable.

3. Services Offered

Different advisors specialize in various areas of financial planning. Consider what services you need, such as:

  • Investment management

  • Retirement planning

  • Tax strategy and estate planning

Ensure the advisor’s expertise aligns with your financial situation and goals.

4. Transparency and Trust

Trust is the foundation of any advisor-client relationship. Before hiring an advisor, ask:

  • Do they fully disclose fees and potential conflicts of interest?

  • Are they upfront about what they can and cannot do?

  • Can they provide client testimonials or references?

An advisor should be willing to answer any questions openly and clearly.

Final Thoughts

Hiring a financial advisor is a personal and strategic decision. If you’re facing major financial decisions, feeling overwhelmed by investment management, or simply want to ensure you’re making the best moves for your future, professional guidance can provide clarity and peace of mind.

By choosing a fiduciary, fee-only advisor with a strong track record, transparent fees, and expertise aligned with your needs, you can build a financial plan designed for long-term success.

Disclosure

Advisory services offered through Meridian Wealth Management, LLC, a SEC Registered Investment Advisor. The information and opinions voiced in this material are strictly for general information only and are not intended to provide any security recommendations, specific advice, or recommendations. Any views or opinions presented in this material are solely those of the Author and do not necessarily represent those of Meridian Wealth Management, LLC. Securities and insurance products are not insured by the FDIC or any federal government agency, are not a deposit of or guaranteed by a bank or any bank affiliate and may lose value. No one connected with Meridian Wealth Management, LLC, can ensure the tax consequences of any transaction. Seek tax, legal, insurance, and investment advice from a licensed professional relative to your situation. All investing involves risk, including loss of principal. Past performance does not guarantee future results. No strategy ensures success or protects against loss. Further, readers should be aware that websites or sources listed in this work may have changed or disappeared between when this work was written and when it was read.

MLA Citations

Mason Stockham
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