The best time to hire a financial planner is when you aren't feeling confident when it comes to dealing with your finances. You can hire someone to take over your whole plan, or just get a second opinion to make sure you are on the right track.

From time to time I get emails from readers who have realized they need financial help that goes beyond reading blogs and books.

Maybe their finances have suddenly grown more complicated, either as the result of a new job or an inheritance. Or maybe they simply want personalized advice that helps them increase their savings or pay down debt.

While I consider myself well-versed in personal finance, I don’t have experience with individual counseling — which is something to consider if you’re seeking a financial advisor. Just like you don’t want to see a doctor who has 10 years of research and publishing experience but has never performed clinical exams, you want your financial advisor to have hands-on counseling experience.

If you’re considering getting a financial advisor, here’s how to know if it’s time, what it’ll cost, and how to choose the right one for you.

When to Get a Financial Advisor

In my opinion, there are three reasons to hire a personal financial advisor:

  1. You feel “lost” in planning for your financial future and need a roadmap.
  2. You just don’t want to deal. When it comes to money, you’re not the DIY type, and you just want a professional to take care of it.
  3. You like managing your money, but realize your financial plan would benefit from an impartial and unemotional third-party opinion.

I think all of us fall into one of these three categories at some point in our financial lives. But let’s look at each situation and consider when it’s your time to hire a financial advisor.

1. You Need Help Planning Your Financial Future

This may be true for most of us when we’re starting out. There are so many goals competing for our limited financial resources:

  • Paying off student loans.
  • Funding a retirement account.
  • Saving an emergency fund.
  • Buying a house.
  • Taking a vacation.
  • Getting married.
  • Having fun NOW.

It’s no wonder we find money so overwhelming as 20- and 30-somethings!

While it will cost you to get the help you need from a professional, if it will help you get ahead in the long term, then the price of a financial advisor is worth it.

Here’s my take: if you have a comfortable emergency fund and can afford a financial advisor’s fee without going into debt, a financial planner might be a good investment. In fact, the planner’s fee may pay for itself in a few years if they help you make better financial decisions in the meantime.

Related: Emergency Funds: Everything You Need to Know

2. You Just Don’t Want to Deal with Money

Some people hate managing their money. And that’s cool; what’s important is that you recognize it and get someone to do it for you. In this case, hiring a financial advisor is a no-brainer.

What you’ll need, however, is enough investable assets for an advisor to take you on.

When it comes to investment advisors, most can’t afford to work with you as a client until you have $100,000 or so of investments. Some drop that to $50,000, while others won’t take clients until they have $500,000 or even $1 million to invest. So you’ll have to shop around.

I think the $100,000 level makes sense. If you have less than that invested, you’re better off sticking your money in low-cost index funds and leaving it be.

Related: How to Invest in Index Funds: A Beginner’s Guide

3. You Want an Impartial Third-Party Opinion on Your Money

There are a lot of do-it-yourself investors who never hire a financial advisor. Their thinking is, “I like doing this myself and I’m fairly savvy, so why would I pay someone 1% of my money every year and reduce my returns?”

But here’s the thing: no matter how much you learn about investing, you’ll never be on an even playing field with Wall Street. And no matter how much you learn about investing, you’ll always be human and, therefore, susceptible to making irrational decisions.

If paying a financial advisor saves you from one bad decision a year — or spots an opportunity that you overlooked — they may very well increase your investment returns, despite the fee.

Read more: Do You Need a Financial Advisor?

How Much Does a Financial Advisor Cost?

In a perfect world, everyone would have financial advisors with whom we could check in once a month or call before making a big purchase or investment decision.

Realistically, however, financial advisors are expensive. As a result, the decision to hire a financial advisor requires a careful cost/benefit analysis.

And to make it even more complicated, different advisors work on different fee structures:

  • Annual retainer. Financial planners typically charge a few thousand dollars for a comprehensive financial plan.
  • Hourly rate. Rates by hour typically run a few hundred dollars an hour.
  • Percentage of invested assets. You’ll be charged a flat percentage of your total account balance — usually between 0.25% to 1% per year. An unofficial industry benchmark is 1%, although advisors may charge slightly more or less.

Let’s look at some real numbers so you’ll get a sense of how much you may be paying if your advisor charges a percentage-based fee.

If you have $200,000 to invest, you would pay $2,000 a year. If you have $1 million, the fee would jump to $10,000 a year, although some advisors have a fee structure in which the percentage slides down as your assets grow.

Rule of thumb: always ask how your advisor is compensated.

Some financial advisors earn their fees from banks and investment companies. So although they offer “free” advice — which may very well be tempting — these advisors usually earn commissions from the investments they sell you. Over time, being in the wrong investments may actually cost you more than paying a fee-only advisor.

I’m not saying all advisors who work on commission are going to give bad advice, but a good advisor should be transparent.

Read more: Are Certified Financial Planners Worth the Money?

How to Choose a Financial Advisor

When it comes to choosing a financial advisor, you’ll want to make sure you’re matched with someone who understands your goals, has experience working with people in your situation, and, most of all, makes you feel comfortable. The last thing you want is to end up with an advisor who doesn’t answer your questions in a way you understand, or who pressures you into investments you’re not comfortable making.

You’ll want to go into your vetting process with a few pre-planned questions:

  • Do they have experience working with clients like you? This doesn’t just apply to your financial situation, but also if you’re a member of the LGBTQ+ community; Black, Indigenous, or a Person of Color; single, married, or divorced; etc.
  • What services do they provide? Do they offer investment advice, tax support, budgeting help, etc.?
  • How much do they charge? Are they hourly, on retainer, or percentage-based?
  • What’s their communication style and frequency? How often do you want to hear from your advisor, and what format is best for you: email, telephone, in-person, or all three?
  • What firm has possession of your assets? If you’re investing with your financial advisor, make sure that the custodian is a major brand name firm that you have heard of, like Fidelity or TD Ameritrade.

For more in-depth advice on choosing and vetting financial advisors, check out How to Choose the Best Financial Advisor.

After you’ve “interviewed” your potential advisor, consider how talking to them made you feel — were you completely overwhelmed or are you now feeling confident about your financial future?

Don’t trust your finances with someone who leaves you feeling “off.”

Where to Find a Financial Advisor

I recommend two websites that make finding a financial advisor easier: Paladin Registry and SmartAsset.

Paladin Registry offers two free ways to track down a financial professional in your area. You can use the match service, which gathers information about you and your needs, then suggests the right advisors. Or you can use the directory and go through the list of certified professionals on your own. Once you find an advisor you’re interested in, you simply schedule an interview.

Another useful tool for your financial planner search is Smart Asset. After answering a few questions about your current situation and future financial goals, the built-in tool matches you with up to three prescreened advisors. You can then easily set up an interview with each planner and choose the one who best fits your needs and preferences.

Read more: Best Financial Advisors for Millenials and Gen Z


The best time to hire a financial planner is when you aren’t feeling confident when it comes to dealing with your finances. They can take over your wealth management or just give you a second opinion so you can make sure you are on the right track.

So many of us feel lost in our finances, but getting a second opinion from a financial advisor can be reassuring. It stirs up the pot — and that’s almost always a good thing!

Featured image: Andrey_Popov/

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About the author

Chris Muller picture
Total Articles: 285
Chris has an MBA with a focus in advanced investments and has been writing about all things personal finance since 2015. He’s also built and run a digital marketing agency, focusing on content marketing, copywriting, and SEO, since 2016. You can connect with Chris on Twitter.