Do I need a financial advisor?

Even if you think your finances aren't complicated enough to talk to a professional, there are times when doing so can help in ways you might not expect.
Throughout your life, every change — be it a new job, marriage, the arrival of a child or a death in the family — can raise fresh questions about your finances. Yet even when nothing new is happening, you may find you are too busy to address the day-to-day challenges of managing your money. At times like these, a financial advisor can help you navigate your financial life.

What do financial advisors do?

One of the most important things an advisor can do is make sure you have a personalized financial plan that you can understand and commit to. That holds true no matter how much money you have or how confident you feel tackling your finances on your own. Your plan could help you track your expenses, set savings goals, create an investment portfolio aligned with your objectives, and more to help you prepare for the future. Just as you see a doctor to tend to your physical health, you can consult with a financial advisor to address your financial health.

The benefits of working with an advisor

If you feel you don't have the expertise, time or desire to create a financial plan, you're not alone. Amid all the noise out there about personal finance and investing, meeting with an advisor can ensure that you are educated about the best path to achieving your goals. And then an advisor can help you remain diligent and intentional about pursuing that plan over the long term.
If you're facing one of these five scenarios, seeking help from an advisor can be especially valuable.
Saving for future goals
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Saving for future goals
"I have lots of financial priorities — paying off debt, buying my first home and finding money to save for future goals. I'm not sure where to start!"
— Rosa, 28
Saving for future goals
In order to save and invest for important goals, you'll want to have a strong foundation in place. You can work with an advisor on:
Budgeting: By tracking how you're spending your money now — worksheets can help (PDF) — you can identify ways to free up money to save toward your goals.
Managing your debt: If you have sizeable credit card debt, an advisor can help you prioritize payments and explore ways to consolidate your balances to save on interest.
Building an emergency fund: Keeping at least three to six months of expenses in cash should be a priority so you don't go into debt to cover a large, unexpected expense.
Starting to invest
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Starting to invest
"I've been reading about how important it is to start investing early. But I don't have a clue what investments to choose."
— Michael, 31
Starting to invest
While picking investments may seem challenging, especially when you are bombarded with advice from friends, social media or the internet, an advisor can help guide you in the following ways:
Creating an investment portfolio: Before you select a single investment, you'll want to determine an appropriate mix of stocks, bonds and other assets — what's called asset allocation. Tailoring your investments to your goals, time horizon, risk tolerance and capacity is a key to long-term success.
Monitoring your journey: Through periodic check-ins, an advisor can evaluate your progress toward your short- and long-term goals, make sure your investments and goals are still aligned, and identify potential adjustments.
Helping you stay the course: The stock market has always gone through periods of volatility. An advisor can offer reassurance, helping prevent you from panic selling and keeping you focused on your goals and the strategy you've established.
Changing jobs
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Changing jobs
"Every time I change jobs, I face a bunch of decisions about my retirement savings, like what to do with my old 401(k) and how much I should save in my new plan.Footnote 1"
— Emily, 38
Changing jobs
An advisor can work with you to create a retirement savings target and weigh in on decisions you'll face along the way, such as:
Making the most of a workplace retirement plan: Taking full advantage of a 401(k) or another workplace plan is vitally important. An advisor can help you decide how much to save and understand what your various investment options are.
Picking a Roth or a traditional plan: Employers are increasingly offering you the choice of a traditional or a Roth account for your 401(k). An advisor can talk you through the benefits, trade-offs and tax implications of each option.
Managing your old plan: You may not give a second thought to what to do with your previous workplace plan. An advisor can help you weigh the pros and cons of all your options, including rolling your retirement funds into an IRA.Footnote 1
Investing outside a workplace plan: An advisor can explain how an individual retirement account (IRA) could also fit into your overall retirement savings strategy and present options on the types of accounts available.
Receiving an inheritance
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Receiving an inheritance
"I've just inherited money from my mom, including an IRA, and I am not sure what to do."
— Leslie, 45
Receiving an inheritance
Newfound money can jump-start your ability to meet your financial goals, especially if you manage it well. An advisor can help by:
Reviewing your new portfolio: The investments your mother held may not match your time horizon and risk tolerance. A financial advisor can help you review your goals in light of these new funds and settle on an asset allocation that is appropriate for you.
Pointing out potentially tricky rules: When you inherit an IRA from a parent, you will be subject to strict rules about the timing and tax treatment of your distributions. An advisor can help you prepare questions to discuss with a tax professional.
Creating a withdrawal strategy: An advisor can explain strategies for taking required distributions from your inherited IRA and reinvesting the funds.
Juggling competing goals
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Juggling competing goals
"Our financial life has become more complicated since we've had kids. We want to save for their college education, but we also need a bigger house, and our living expenses have increased."
— Taylor and Aaron, 33 and 34
Juggling competing goals
As life becomes more complex, an advisor can walk you through these steps:
Prioritizing your goals: When new financial pressures make it hard to do everything, it can be helpful to sort your goals into three categories: essential (an emergency fund or retirement), important (like college savings or a new home) and aspirational (a big vacation). An advisor can help you identify and prioritize your goals — and attach a dollar figure to each.
Examining your expenses: Major life events are reasons to review your income and monthly expenses with an advisor and look for ways to free up money to put toward your new financial priorities.
Identifying next steps: An advisor can suggest savings vehicles to help you meet the goals you've identified, including a 529 college savings plan and retirement accounts, and offer strategies for managing debt and investing for other goals.

Next steps

Asset allocation, diversification and rebalancing do not ensure a profit or protect against loss in declining markets.
Footnote 
You have choices about what to do with your 401(k) or other type of plan-sponsored accounts. Depending on your financial circumstances, needs, and goals, you may choose to roll over to an IRA or convert to a Roth IRA, roll over a 401(k) from a prior employer to a 401(k) at your new employer, take a distribution, or leave the account where it is (if applicable). Each choice may offer different investments and services, fees and expenses, withdrawal options, required minimum distributions, tax treatment (particularly with reference to employer stock), and provide different protection from creditors and legal judgments. These are complex choices and should be considered with care. For more information, visit our rollover page or call Merrill at 888.637.3343.
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