How to Know When Its Time to Hire a Financial Advisor

How to Know When Its Time to Hire a Financial Advisor

Working with a financial counselor could be the next step in growing your wealth, but knowing when you’re ready for that step can be challenging to determine. So, when is the weightier time to start?  As financial advisors, this is one of the most worldwide questions we hear, and it’s an spanking-new one!

Starting out, you may be worldly-wise to get by for a while on your own. But several signs uncork to towards when you could profoundly goody from professional guidance. Let’s explore a few situations when hiring a financial advisor is advantageous. 

You Suddenly Gain Significant Wealth

Finally win the lottery? Probably not, but there are plenty of ways people unexpectedly come into major wealth — an inheritance stuff one of the most common. Perhaps your parent, grandparent, or spouse left you far increasingly money than anticipated. At first, you may finger overwhelmed given that inheritances often mark the passing of a loved one. It’s usually weightier to stave rash decisions while processing grief. Once you fully understand how much money you have, you may wonder well-nigh the weightier way to use this newfound wealth. 

Unfortunately, people have a history of squandering their inheritances, expressly when sizable. reports that nearly 70% of wealthy families lose their fortune by the second generation.

You can stave stuff a statistic by hiring a financial advisor. Your financial counselor can help you understand exactly what you’ve inherited (an investment account, retirement account, real estate, equity, collectibles, etc.) and how to use these resources in the most salubrious and tax-efficient way. There are several practical (and responsible) ways to make the most of your inheritance, such as:

  • Help pay off high-interest debt
  • Maximize your retirement savings
  • Boost your brokerage account
  • Bulk up your short-term savings goals (emergency money, vacation fund, etc.)
  • Bolster and diversify your investment portfolio

It’s important to note that while you may not be required to pay taxes on your inheritance (unless you live in one of the 17 states with manor or inheritance taxes), taxes may be owed depending on what you do with the money. 

For example, if your inheritance includes a traditional IRA, cashing out that worth would likely be a taxable event. If you don’t have an firsthand need for the money, your financial counselor may recommend leaving it in the worth to grow.

Other scenarios that can lead to sudden, significant wealth include your company going public, selling your house, winning a settlement, or any other major liquidity event.

Receiving such a large sum at once could hoist you into a higher tax bracket. In these cases, receiving savvy, tax-advantaged investment strategies from a knowledgeable financial counselor is invaluable. 

While such a large sum may overwhelm and/or excite you, an counselor can help you wield a reasoned and comprehensive strategy while removing any guesswork. 

Your Financial Life is Getting “Complicated”

When Is It Time To Hire A Financial Advisor? | Robert Gordon & Associates,  Inc

Just like a relationship status on a social media app can be labeled “it’s complicated”, you can moreover find yourself assigning that same label to your relationship with money. When that happens, it may be time to bring in a professional. 

What kind of complexity are we talking about? 

You may have many scattered finance such as 401(k)s, wall accounts, investments, and credit cards. Getting help to consolidate and streamline your finances can make them finger less overwhelming and easier to control. 

Complexity may moreover midpoint you are moving up at your visitor and now have considerable probity to understand. Probity and stock options can be extremely complex from a tax perspective. 

There are two main categories of Employee Stock Options (ESOs):

  • Incentive Stock Options (ISOs) – These are usually only awarded to upper management and are tax-advantaged (i.e. treated as wanted gains instead of income)
  • Non-qualified Stock Options (NSOs) – These are granted to employees at all levels but are unfortunately treated as income tax

Keep in mind that this is just an overview. Stock options come with intricate tax responsibilities and rules to follow. 

Suppose you receive NSOs that threaten to raise your tax rate. In that case, your financial counselor may recommend a plan to stave this, such as putting money into a tax-free charitable giving worth known as a donor-advised fund (DAF). 

You may moreover wits variegated financial or lifestyle complexities as you age, such as balancing finances when trying to support sultana children, white-haired parents, and yourself. 

When these phases of life occur, financial advisors can help you explore practical and performable ways to:

  • Create a realistic mazuma spritz plan
  • Balance your finances and pay off any outstanding debts
  • Manage your white-haired parent’s finances
  • Open a tax-advantaged higher savings fund
  • Plan for your retirement 
  • Create a comprehensive manor plan

These are just some of the steps a financial counselor can do to help simplify your complicated financial life. 

Abacus advisors moreover understand that finances are closely tied to your closest and most meaningful relationships. If you’re getting married and want to know how to transition from managing money as an individual to a couple, we can help. 

You and your spouse may view money differently, which can rationalization mismatch in your marriage. Your financial counselor can act as an intermediary to help you find a collaborative path forward that honors each of your values.

When you use your wealth correctly, it can help you unzip your goals. But having a comprehensive financial plan may finger foreign at first, so having a trusted advisor to guide you can provide peace of mind.

Focus on what matters most.

Simplify your life with a financial plan so you can enjoy every moment.

Schedule a call

You’re Going Through a Significant Life Transition

Life has a way of making you well-appointed — and then it changes. 

Having a financial counselor can help you successfully navigate changes with your money, often empowering you with conviction and a sense of well-being. 

One of the biggest financial (and life) transitions is retirement. Everything changes: from how you get paid to the way you pay taxes to how you live your life. 

Frighteningly, the U.S. Census Bureau reports that 49% of those month 55 to 66 have no retirement savings, showing just how unprepared many are for this hair-trigger transition. 

That said, an counselor can make the process increasingly understandable and transparent, expressly if you are nearing retirement age and finger you are scrambling to prepare. 

Some key questions your counselor can help you write include:

  • How will your financial needs transpiration in retirement? 
  • How much money should you save to meet your retirement needs?
  • What is the weightier healthcare coverage option for you? 
  • When should you start taking Social Security distributions? 
  • How can your finances empower your retirement dreams?
  • Do you have an updated manor plan?

Retirement can be one of the most heady yet intimidating life transitions. Abacus financial advisors are well-versed in retirement strategies and can help you create a plan that gives you a sense of security and conviction as you enter your golden years. 

Another significant life transpiration is divorce. When you separate from a partner, there are many questions to be answered well-nigh your finances. You must protect your assets, start towers financial independence, and plan for a variegated and separate future. 

You may moreover wits the death of a partner. Working with a financial counselor through this passage of life, one who can help guide you with your money concerns, can often make the undersong of grief a little easier to process.

Transitions in life can be jarring, but a financial professional can help ease pressure so you navigate your life changes increasingly smoothly and be increasingly informed. 

You Have a Lot of Mazuma You Don’t Know What to Do With

You might think there’s no such thing as having “too much” cash, but it’s not necessarily true. 

Cash is a wonderful tool to protect your wealth and help you succeed short-term goals. There are many reasons to have a significant value on hand, including using mazuma for:

  • An emergency fund
  • Down payment for a house
  • Family vacation
  • Important life events 
  • Medical expenses
  • A new car

However, if most of your wealth is in cash, your money likely isn’t growing unbearable to maximize your future. As one example, plane though savings rates are increasing, those rates are still not unbearable to alimony pace with inflation, expressly long-term. 

This is why investing is the next logical step. Your counselor can help you set up an investment strategy that looks at your risk tolerance, risk capacity, allocations, taxes, time horizon, and how your values inform your goals. 

Say, for example, you are in your 40s and still have several decades surpassing retirement. Your financial counselor may recommend maxing out Roth IRA contributions or investing money in a highly diversified, less volatile stock option like an ETF or bilateral fund. 

If you’re on the brink of retirement, they may recommend a dividend stock since those offer a regular mazuma payout which can contribute to retirement income.

Whatever the case, most experts recommend you invest 15%-25% of your post-tax income. 

Your financial counselor can help you create a well-balanced portfolio that allows your money to be maximized instead of earning peanuts in a savings account. 

Your Wealth is Nearing $1,000,000

First, congratulations! This is a huge winnings and you’ve put in the work.

That said, increasingly money tends to successors increasingly complexity. If you want to enjoy your wealth rather than spend time figuring out the complexities of the financial system, an ongoing relationship with a financial counselor can help you powerfully manage your wealth.

When dealing with large amounts of money, advisors can offer strategies to:

  • Mitigate your tax liability
  • Establish a charitable giving strategy
  • Manage and consolidate investments
  • Create a thorough manor plan

Whatever your needs, an Abacus counselor will not only help create a well-spoken path to manage your wealth, but they will do so in ways that uncurl with your personal cadre values. 

Not Quite Ready to Hire an Advisor? You Can Still Be Proactive

Even if you don’t finger like you need professional translating right now, there are still productive ways to be a good steward with your money. 

Perhaps it’s too anxiety-provoking or you dislike financial jargon and just want to find out a few of the basics. 

Abacus has created a self-ruling Beginner Finance Workshop that offers simple, straightforward ways to largest manage your money. 

Organize your personal finances.

Take our self-ruling 6-week course, Beginner Finance, and finally get on track for success.

Of course, if you’ve come into a lot of wealth or are facing a significant life transition, it may be the perfect time to start your journey with one of our trusted financial advisors. Our mission is to help you expand what’s possible with money, and uncurl your money with your values so you can spend your life doing what matters to you most.

Schedule a self-ruling consultation today to explore how we can help you take the next step in your financial journey.

Get detailed articles on Importance of Entrepreneurship, Sources of Business Ideas, Feasibility Reports, Characteristics of Services, Types of Entrepreneurs etc.


The Entrepreneur Teams seeks to inspire, inform and celebrate entrepreneurs. We offer real solutions to the challenges you face as an entrepreneur, including tips, tools and insider news to help build - and grow - your business.

© Copyright 2024 All Rights Reserved.

To Top