5 top reasons to turn to a financial advisor

Text size: aA aA aA
By planning ahead for life's big events, you can be better positioned to reach your financial goals — and more prepared to meet any unexpected challenges.
Most of us start out thinking we can handle money decisions on our own. Then as our careers, lives and goals expand, we begin to wonder: Am I making all the right financial moves? Do I know enough to make smart investing choices that can help me meet my goals? Even then, it often takes some major turning point — marriage, divorce, a family illness — to prompt us to look for help.
"Major life changes like these often make people realize how much they don't know about the markets and their financial lives — and what's at stake," says Michael Lawrence, senior market executive at Merrill. But, he adds, "It's not always a good idea to wait until you need someone knowledgeable to seek it out."

The risks of waiting — and how planning ahead can help

"While major life events often encourage people to seek financial advice, knowing what you want to do before they occur can be very valuable," Lawrence says. If you've thought through your goals with an advisor and have an informed strategy in place for reaching them, major life events are less likely to pull you off track.
"Even if you think you're too young to be seeking financial advice, having a knowledgeable sounding board can help you take charge of your decision-making, rather than simply reacting," he adds. "When you're forced to react to unexpected financial challenges, rather than planning ahead, often your choices are limited."
Below, see how an advisor can help you plan ahead for five of life's most common financial turning points.

1. You're starting a family

The average cost of raising a child comes to $310,605 for the first 17 years alone, according to a Brookings analysis of government figures.Footnote 1 And that doesn't include college tuition. An advisor can walk you through such issues as when you might like to start saving for your child's college education — use this College Planning Calculator to estimate future costs — and how you can keep your retirement plan on track while providing for a growing family.
Ask an advisor: When should we start saving for college?

2. You're buying or selling a home

Major financial transactions, like buying or selling a home, often involve financial retrenchment or important decisions about how best to deploy your financial resources. Long before you begin house hunting, an advisor can help you figure out how much you'll need to save and how you'll be able to keep your other important financial goals on track. If you're selling, an advisor can be a good source of ideas about using the equity you might have built up in your home to help you pursue other goals.
Ask an advisor: How much debt can I potentially take on?

3. You're beginning a new relationship — or ending one

Marriage, divorce, remarriage or simply moving in with a new partner are all milestones that can call for careful planning. For instance, along with the often-difficult emotional ups and downs of divorce, both partners will have to deal with important financial considerations. Will you have enough income to support your lifestyle? How will your investments and other assets be divided? You may very well need to change your financial strategy to keep your goals on track, Lawrence says. An advisor can offer thoughtful ideas for how to navigate this tricky time in your life.
With a new spouse or partner, you may need to blend your finances, rethink retirement goals and create an estate plan, but a second marriage later in life — when you both may have children and substantial assets — can involve more complex considerations. "It's a joyful occasion, but one that raises questions about how to best combine your financial lives," Lawrence notes. Do you have an estate plan for the two of you that provides for the financial security of the other? Are there children from a previous marriage you'd like to leave an inheritance to? Can life insurance play a role in your planning? How might your marriage affect your Social Security benefits? These are just some of the questions you'll want to work through with your new spouse and a knowledgeable advisor who understands what's important to you.
Ask an advisor: What are the financial implications of a relationship change?

4. You've received an inheritance, bonus or other windfall

A sudden influx of cash or assets raises immediate questions about what to do with it. "A financial advisor can help you think through the ways you could put that money to work toward your personal and financial goals," Lawrence says. You'll want to think about how much could go to paying down existing debt, and how much you might consider investing to pursue a more secure future. An advisor can also help you rethink when you may want to retire, he suggests.
Ask an advisor: Should I consider paying down debt? Investing more? Retiring early?

5. You're approaching retirement — or want to retire early

As the length of time you're likely to spend in retirement continues to grow, it's more important than ever to have knowledgeable advice to help prepare financially for that next phase of your life. "The financial decisions you'll have to make in retirement are often more complex than those leading up to it," Lawrence notes. Five or 10 years before you plan to retire — whether that will be at your full retirement age or far earlier — it can be helpful to ask yourself such questions as: What steps should I consider taking now so that I won't outlive my money? When should I claim my Social Security benefits? And how will I fund any unanticipated medical costs and long-term care needs?
Ask an advisor: How can I avoid outliving my money?
As with any major life event, retirement will bring about a host of planning challenges. Still, notes Lawrence, "when you work with an advisor, you'll always have someone you can turn to for advice as your life changes and you need to take a fresh look at your finances."

Next steps

Footnote 1 Brookings, "It's getting more expensive to raise children. And government isn't doing much to help," August 2022.

Investing involves risk, including the possible loss of principal. Past performance is no guarantee of future results.