If you’re thinking about hiring a financial advisor, chances are that something big has taken place in your life, and you’re looking for advice, support and guidance.  It might be that you’ve gotten married, or had your first child.  It might be that you’ve received a big promotion at work, or a significant pay raise.  Maybe you have questions about your employer’s benefits package. Or maybe you’re wondering how you can simultaneously save for retirement and your child(ren)’s college education, while also paying off your own student loans.

As a young professional, you may have lots of questions about your personal finances, and you may be unsure whether you’re making the right decisions.  A good financial advisor can help you answer all of these questions., and provide you with peace of mind that you’re on the right path.

What is a Financial Advisor?

The term “financial advisor” is a bit vague.  Unfortunately, weak regulation of the financial services industry means that virtually anyone can call themselves a financial advisor, and many people do just that.  In the aftermath of two historic financial crises – the 2000-02 dot com crash and the 2007-09 Great Recession – that severely damaged the reputation of the industry, many stockbrokers, insurance agents and commission-based salespeople have tried rebranding themselves as financial advisors, in an effort to restore their credibility.

A good financial advisor can be thought of as a coach, or a co-pilot on your boat.  Their role is to help you define and prioritize your goals and objectives, and then help you design a robust plan to achieve them.

The right advisor will be able to help you with many aspects of your financial life, including but not limited to:

  • Building a budget and managing your cashflow
  • Insurance and risk management
  • Minimizing the taxes you pay
  • Saving for college
  • Getting ready for retirement
  • Creating an estate plan
  • Designing an investment strategy to help fund your goals, while taking no more risk than is necessary, and possibly managing your investments for you

When should you consider hiring a financial advisor?

Most people don’t wake up one morning and decide to hire a financial advisor.  Instead, there’s usually some important event or life change that causes them to seek out the advice and guidance of a professional.  For young professionals like you, what might be a reason to look for a financial advisor’s help?

You Have Rising Income and Growing Assets

As a young professional with a career that’s off to a great start, you’ve begun building a solid financial foundation. How do you know when it’s the right time to hire a financial advisor?  One good rule of thumb is that when either your household income or your investment assets reach six figures (i.e. more than $100,000), it’s a good idea to look for help.  Studies of investor behavior have shown that as the “numbers” get bigger, a person’s stress and anxiety about their decision-making increase, too.

A financial advisor can help you feel more comfortable with your financial situation by acting as an independent, objective resource.  And if your advisor is a fiduciary (more on this below), you can take comfort from the knowledge that they must always act in your best interest.

You’ve Received An Inheritance or Financial Windfall

If you’ve recently received an inheritance or other financial windfall – perhaps from your employer going public, or the exercise of stock options – you may want help with understanding how these resources will impact your financial plan.  What will the tax consequences be?  Does it mean that you can now afford to send your child(ren) to private college? Can you buy that vacation home on the lake? Should you prepay your mortgage, or plan to retire sooner?

A good financial advisor can help you understand what’s possible, and how all of these important financial decisions are inter-related.  And using sophisticated planning software, your advisor can show you the impact of one or more of these “what if” choices on the other aspects of your plan.


Want to learn more about financial planning? Contact our team at Springwater Wealth today to learn how we can help you develop a plan for your financial future. 


You’re Going Through a Divorce

Divorce can be very emotionally and mentally taxing.  In addition, it can be financially devastating, because the income and assets that previously supported a combined household now have to support two separate ones.

A good financial advisor can help you navigate the settlement process, negotiate an equitable division of marital assets, and help ensure that you avoid financial mistakes.  If your advisor also holds the CDFA® credential, they’ll have specific expertise and training in the area of divorce financial analysis.

You Have Children

If you’re preparing to start a family with your spouse/partner, or have already done so, you may want help planning for your child(ren)’s future.

A good financial advisor can help you create a plan to pay for college, the cost of which continues to go up faster than the overall rate of inflation.  And your advisor can help ensure that your family is protected for the future, by helping you select the right type of insurance coverage, and connecting you with an experienced attorney to prepare your estate plan.

You’d like help with tax planning

As soon as you started your career, you probably realized that taxes affect almost every aspect of your financial life. A good financial advisor will be able to work with your accountant or CPA to ensure that you avoid potentially costly errors, while paying as little tax as you’re legally required to.  If you own your own business, that may include setting up a company-sponsored retirement plan.  If you’re climbing the career ladder at a corporation, it may involve stock options, restricted stock units, an employee stock purchase plan, or a deferred compensation program.

Where can you find a financial advisor? 

Perhaps after reading this you’re more convinced than before that you can benefit from the advice and guidance of a trusted financial advisor.  But, you also know that many in the financial services industry hold themselves out as financial advisors, without truly acting in that role.

Consider using a prospective advisor’s professional qualifications as your first filter. While financial advisors can hold a variety of professional credentials, many of these designations lack substance.  The two credentials considered the “gold standard” are Certified Financial Planner™ (CFP®) and Chartered Financial Analyst (CFA).

Now, where can you find one?

You can find qualified advisors in the following organizations:

The National Association of Personal Financial Advisors (NAPFA)

Garrett Planning Network

XY Planning Network

Alliance of Comprehensive Planners