When to Hire a Financial Advisor

By Brad Harvey on June 6, 2024

The landscape of those offering financial advisory services may be crowded, and yet, many potential investors do not have a clear understanding of when it might be helpful to hire someone. Due to relatively recent technology, investors may begin their investment journey earlier than before due to the advent of robo-advising tools.

We are often asked: “When is the right time to hire a financial advisor?” You may think there is an automatic point in your life at which it makes sense to hire someone for financial advice, or you may worry you do not have enough money saved to interest a professional financial manager. People realize the value of seeking help with their investments at various times in their lives. Research conducted by Vanguard demonstrated that those who work with an advisor typically increase their returns by roughly 3% per year over what they could achieve themselves. ¹

The first interaction you may have with a financial advisor is through your employer’s 401k plan. Typically, employers work with a group of advisors based at one company. The advice s may be solely focused on the investment account aided by the employer and not based upon your larger financial picture. You might consider hiring a financial advisor to counsel you directly on your unique needs.

A financial advisor possesses the tools and knowledge to help lead clients in the right direction to achieve their goals, whether that means saving for events such as weddings, births, college, travel, retirement, long-term health needs, opening or closing a business, how to handle an inheritance or a bequest, etc.

They can help you answer questions such as:

“Am I getting a good return on my investment?”
“What is the best way to pay off my student debt?”
“Can I renegotiate my loan terms?”
“How much should I save for an emergency fund?”
“When should I start taking Social Security benefits/When will I be able to retire?”

When considering working with an advisor, it is essential to understand their minimum investment requirements for asset management and how their fee structure typically works. Advisors may work on commissions (transaction-based) or on an advisor fee basis (typically expressed as a percentage of assets being managed). No matter the payment structure, working with a fiduciary is always in your best interest.,

If you do not yet have the minimum investment threshold to work with a financial advisor or want to dip your toe into investing to start, have no fear! Robo advisors help people invest earlier than ever in their lives. To save time, control costs, and avoid a high minimum investment barrier, people are choosing to go online, fill out a questionnaire, and then receive a portfolio strategy electronically – never having met with an advisor. Behind the scenes, a computer takes the answers to the questionnaire and, based solely on that, puts together a portfolio for you. The investors still have the final approval of the plan. To read more about robo-advising, see “The Pros and Cons of Robo Advisors.”

If you meet the minimum investment threshold to work with a financial advisor but could use some tips on how to find the right one for you, please read our blog, “How to Find a Financial Advisor,” and view our video, “Working with a Fiduciary.”

¹ Francis M. Kinniry Jr., Colleen M. Jaconetti, Michael A. DiJoseph, and Van Zilbering, 2014. Putting a value on your value: Quantifying Vanguard Advisor’s Alpha. Valley Forge, PA.: The Vanguard Group.

About Harvey Investment Management, Inc.

We aim to empower and support investors no matter where they are on their financial journey. Like us on Facebook, follow us on LinkedIn and X, and watch our informative videos on our YouTube channel. In addition, we invite you to learn more about our team and how we can help you reach your financial goals by emailing or calling us at 719.960.0969.

Brad Harvey, President and CEO

Harvey Investment Management, Inc. is a group comprised of investment professionals registered with Hightower Advisors, LLC, an SEC registered investment adviser. Some investment professionals may also be registered with Hightower Securities, LLC (member FINRA and SIPC). Advisory services are offered through Hightower Advisors, LLC. Securities are offered through Hightower Securities, LLC.

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