How Much do You Really Need a Financial Adviser?

No matter how old you are and how many years you have worked, this is a question that always comes up - do you need a financial advisor? There is no simple answer to this question. In fact, many experts in this field cannot agree on a common answer. Like most things related to the stock market it comes down to how much risk you're willing to tolerate. If you look at the historical data, very few financial advisors or financial analysts have with any degree of accuracy predicted these huge market crashes. Yet most of us not in the financial sector have even a harder time predicting trends of growth and income. I was busy myself with taking online classes in project managementfrom one of the best colleges online, so I needed financial advise.

So you have to ask yourself, “am I comfortable with what I am doing with my money” and what “am I doing to prepare for my family's financial security?” As I said earlier it comes down to your risk tolerance. The case can be made for the use of financial advisors. For example, these are professionals that have had extensive training in this field. They know how sophisticated instruments like exchange traded funds for example, operate. They also have been trained to read and understand large company's financial records. At the same time, their advice does not come cheap. Many financial advisors charge anywhere from $200-$400 per hour. And if you go to very well reputed managers or advisors, they can charge upwards of $5000-$10,000 for a meeting. Depending on who you talk to, this is a small price to pay. If you want someone to actively manage your investments, they can charge you 1 to 2% of the value of your portfolio. All these expenses can start to add up pretty quickly.

One could make the argument that if they were so good, why were they unable to predict the market crashes and protect everyone's investments? The answer to this question is rather simple actually-they make better educated guesses than someone who's not trained in this area. Also, remember that they will get paid no matter how your portfolio does! Also, they can only advise you on how you can protect yourself and your family financially in the future; in other words by no means can they guarantee that if you follow their advice that you will be on a much better place financially. Like most experts you're more likely to benefit from listening to them than not.  

So, getting back to the question of do you really need a financial advisor, the answer is very simple. Are you comfortable with how your money is invested and growing; if yes, then you don't need one. If you think you are overwhelmed and could use the advice of an expert then absolutely yes. Good luck with your investments!