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4 Reasons You Should Be Working with a Financial Advisor Right Now

Fullerton Financial • Dec 03, 2020

Financial mistakes today can mean big consequences later...

Going at it alone when it comes to your financial goals can be costly. You may not even realize just how costly it is until you’re reviewing your finances in the future and find out how little your money has been working. Over 75% of Americans choose to wing it with their finances and do not seek professional financial advice, even despite the fact financial illiteracy can cost Americans over $307 billion annually. If you’ve built a career and managed your money with the expectation it will pay off - you don’t want to be a part of that statistic.

A financial advisor does exactly what their title suggests — they advise you on matters relating to your personal finances including investments, savings, budget, insurance, and tax strategies that not only saves you money now, but can set you up for financial success in the future.

Financial mistakes today can mean big consequences later. You may be in the midst of your career, raising your family and living your life. Managing your money in a complicated financial ecosystem is challenging and it may slide to the wayside in lieu of more pressing things.

At Fullerton Financial Planning, we take the stress out of planning for your financial future. You’ve worked hard for your money, so it’s imperative that your retirement dreams coincide with your overall financial plan. Do you know if you’ll have enough money to last?

Why Should You Work with a Financial Advisor?

While we would all like to take up the offer of a seasoned financial advisor, the cost can be prohibitive and even deterrent, especially early in your career. You’re not really thinking about retirement, but you are already making decisions (contributing to a 401k and/or pension) and investments (cars, houses) that can impact your financial health not only now, but far into the future.

A great example of financial decisions you tend to make at a young age happens frequently to college students. According to estimates, more than a third of college students have over $1000 in credit card debt, not to mention student loans. There’s nothing like debt to ensure you never meet your financial goals.

No one needs to work with a financial advisor. One can go at it alone and learn the ropes of personal finance and start making good financial choices by understanding how debt, compound interest, and too-good-to-be-true investments truly work. But when it’s not your focus, it’s easy to make missteps.

4 Things an Advisor Should Be Doing for You

1. Helping you define your financial goals

Whether you are on the verge of retirement or wanting to get the most out of retirement, it’s difficult to know where you are or if you are heading in the right direction without proper goals. Your goals will rise out of your personal values and must be specific and achievable. A financial advisor will help you define those goals and build a plan that’s right for you.

Financial advisors are not just for those planning for approaching retirement; it’s also for those who want to manage their money well in general. If you’re a college student hoping to dodge the credit card schemes we mentioned, or if you’re mid-career and want professional eyes on your contributions and investments, it’s never too early to get financial advice.

A good financial advisor keeps up to date with evolving trends, laws and developments. When you’re considering working with a financial advisor and trying to find out if they’re a good fit for your needs, you should come out of your first meeting or call with some ideas about how they’ll help you specifically. If you mention college loan debt and a growing family, make sure they recognize that when talking about options. If you have a more immediate goal like buying a new laptop, you should have an idea about how they’ll help you with that as well.

2. Organizing all of your necessary documents

There are numerous documents necessary for a complete financial plan. Everything from a will to 401(k) documentation should all be in one place for secure storage and easy access.

Does your financial plan consist of a stack of papers that feels like it needs someone from NASA to understand? A financial professional can help with that. Financial advisors can provide advice and assistance on many levels - but make sure, especially when you’re going over important documents, that they’re equipped to handle everything you need them to.

3. Providing a clear financial assessment

Do you know where you stand financially? Working with a financial advisor can help you understand where you currently stand, what steps need to be taken, and if your financial plan matches your values.

It may seem like a strange thing to consider when you’re putting together a financial plan, but when your personal values and financial action plan don’t align, you may find yourself behind or completely absent from your goals.

Your values are what you hold most important in your everyday life. Many people say their families are most important, or their faith, for instance, and they’re doing okay because they’ve got a 401k and health insurance; they may even own a house and a couple of cars - but are they financially okay?

A good financial advisor may show that despite your progress on some goals, you may not have a will in place. Why is that a problem? Without a will in place, there may be no back-up plan or road to financial recovery for your family if you or another immediate family member dies unexpectedly. A good financial advisor will help you keep these values top of mind and construct an overall plan that protects you and your biggest priorities.

4. Supporting you to live and retire with confidence

Don’t do it alone. You need someone who can provide guidance and support. Changes in the market and life can affect the outcome of your financial plan.

Before COVID-19, people over age 55 represented 25% of the American workforce. Now? That ratio is reversed as the older population has been more susceptible to the virus and the younger population has remained in the workforce. If you were over 55 and counting on additional income years, this could be a problem that affects your plan.

Even without COVID-19, many retirees may find it difficult to live comfortably solely on Social Security benefits alone - especially when the annual cost-of-living increase (or COLA) doesn’t match or exceed inflation. Financial advisors are well-aware of this issue for retirees and should be working constantly to help develop additional income streams before you get to the point of needing it.

Can I Afford a Financial Advisor?

It may not be the answer you want to hear, but the real question is: how can you afford not to have a financial advisor?

Most financial advisors charge based on how much money they manage for you, a fee structure called AUM, or Assets Under Management. Percentages will vary from firm to firm, so don’t hesitate to be up-front in an initial meeting. If you’re new in your career and working with an annual income of $30,000, for instance, you could be looking at $300 in fees. If you’re at a higher level, investing $100,000, for instance, you could be paying $1000.

Another way financial advisors charge is with a flat rate, or retainer. This can be a flat fee per plan, per hour or per year and can range from two to seven thousand dollars, annually.

If either of those don’t sound like a good fit - there are other routes. It’s not uncommon to find financial advisors who will cater to what works for you. It just starts with a call.

Where Do I Start Looking for a Financial Advisor?

Fullerton Financial Planning understands how important your financial future is to you and your family. When Steve and Stephanie started the firm in 2007, community was an integral part of their business foundation. They value building relationships with clients - getting to know you, your family, your goals, and your dreams. That’s where a real financial plan starts.

Don’t leave your financial future to chance because you don’t think you can afford it, or you’ve been doing okay winging it with investing. It only takes one market downturn or unexpected life event to separate a novice from a veteran. If you want to buy a house, a car, take a vacation or build a nest egg, see what a financial advisor can do for you.

Fullerton Financial Planning is here to help you create a personalized plan for your financial goals. Schedule a call with Fullerton Financial Planning today to discover how we can help you manage your finances so you can pursue your goals.

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