Personal Finance

I'm thinking about hiring a financial advisor since I've no reliable person to take advice from. Does this make sense?

Maurie Backman

Published: February 22, 2025 12:57 pm

When I was growing up, my parents did their best to teach me about money. They highlighted the importance of having a savings account and explained why credit card debt is something to try to avoid at all costs.

But one thing my parents didn’t teach me about was long-term financial planning. I was never introduced to the concept of investing or compounded returns. And had I known about tax-advantaged accounts like IRAs sooner, I perhaps would’ve opened one sooner.

As I got older, I made a point to educate myself on financial matters. But some people need help getting that knowledge, like this Reddit poster. They’re thinking of hiring a financial advisor because they don’t have another person in their life they can get money-related advice from. And I think their plan is a solid one.

Why it pays to get professional help

There may be people in your life who have the best intentions when it comes to dishing out financial advice, whether it’s family members, friends, neighbors, or colleagues. But are those people financial professionals? Do they carry licenses that prove they know their stuff? Probably not.

Similarly, there’s a lot of financial content available on the internet. This I know because I write a bunch of it.

But my content, and most content, is not tailored to individuals. Rather, it’s broad advice. And it doesn’t necessarily apply to everyone. So I think it’s important to work with someone who can give you guidance that’s specific to you and your needs.

I’d also caution against turning to social media for financial advice. There may be some people out there who really know their stuff. But if you’re not sure, you’re better off not taking chances and getting bad advice.

How to find the right financial advisor for you

Even if you have people in your life who are willing to share words of financial wisdom, I’d still recommend hiring a financial advisor. But that doesn’t mean you should hire the first one you stumble upon.

You may end up having a relationship with your financial advisor for many years. So it’s important to find someone whose personality meshes well with yours, and who you feel comfortable sharing your goals and concerns with.

Also, make sure to find a financial advisor who takes the time to explain things. If they throw financial terms around that fly over your head, you may end up agreeing to investment strategies you don’t understand or feel comfortable with.

You may also want to specifically try to find a financial advisor who’s a fiduciary. This means they’re required to put your best interests ahead of theirs.

And while you’re at it, find out how your financial advisor makes their money. They should be more than willing to disclose their fee structure so you understand exactly what you’re paying for.

Some advisors charge an hourly rate, while some charge a fee that’s calculated as a percentage of assets under management. There can be pros and cons to each approach, so consider those carefully before signing on with anyone.