Nine reasons you need financial advice — and how it could help you retire with more money
These are the signs you need proper financial advice from a professional — and not from your opinionated next-door neighbour:
Your net worth is decreasing month-over-month, and you’re not sure why.
Your Home Equity Line of Credit (HELOC) keeps growing and you have nothing to show for it.
You don’t know how to read your investment statements to determine your rate of return (ROR).
You’re older than 35 and you still think retirement is a million years away.
You don’t have a financial plan thddresses your investment needs, the sources of income you’ll have in retirement and clear steps on how to get there.
Budgeting has never really worked for you.
You and your partner are locking horns over how money should be managed in your home.
You think your pension will cover all your financial needs in retirement.
You have good savings habits, but your money isn’t working for you.
In my experience, hiring a professional adviser is worth it — whether you can afford it is a whole other matter. Here are some options depending on your budget
If you simply can’t afford one yet …
With all the voices on Instagram and TikTok pitching free financial advice, it can be tricky to navigate what’s legitimate and what’s unqualified.
Books, podcasts, blogs, vlogs and free webinars can all guide you in your journey to financial literacy. But a custom plan perfectly suited to your needs? That’s where DIY strategies fall short. If you’re simply unable to afford a financial adviser, go to your bank branch for basic financial advisory support. As a part of your monthly fees you can access investment advisory services and sometimes even basic financial planning services — I’ve even seen budget templates offered.
These folks are licensed to sell proprietary products the bank offers, which can skew the advice, but for the most part I’ve found bank branch advice is generally on-point and balanced, albeit scaled down when you’re starting.
My advice is to ask the branch manager to pair you with a reputable adviser with a lot of experience. I also recommend that if you’re using a robo-adviser for your investments, explore if they have any free adviser services you could tap into.
When your finances are stronger, it’s probably going to make sense to hire a professional financial planning service.
If you can afford to hire someone …
Your options are generally a money coach (sometimes referred to as a financial consultant) or a financial adviser. These pros are experts in money management and will help you craft a financial plan.
A money coach is a strategist not associated with a financial institution and won’t sell you in-house products. In addition to helping you build a financial plan, this professional often specializes in supporting you with the behaviours that will help you achieve your financial goals. If you’ve struggled with chronic overspending habits, they will work with you to build a budget you can stick to. A money coach generally has a financial planning background.
A financial adviser works with a financial institution. They can create your financial plan and sell you the products, like investments, insurance or loans, for your plan. They tend to steer clear of anything in the realm of behavioural finance or basic budgeting. Their accreditations generally include financial planning, insurance and investment counselling.
Whatever route you take, make sure that your money coach or financial adviser speaks your language and is honest and realistic. They shouldn’t promise you get-rich-quick schemes or set what seem to be unrealistic goals. Do your due diligence and check their credentials and get a referral or two from them.
There are three ways these advisers typically get paid, and you’ll want to shop around for the best rates:
Hourly (or by a scope of work for a specific project): Most money coaches and financial consultants bill their services in this way, and deliver a very specific service over a set period of time.
Commissions: This applies when you’re buying a specific product, like insurance or a stock or bond, and the adviser earns a percentage commission on the purchase of products such as mutual funds (and sometimes on the sale).
Advisory fees: This is generally a fee for managing assets. It can be a flat fee or a percentage of the assets under management.
Many pros have taken to social media to promote their businesses and enhance financial literacy. Soak all that financial literacy goodness up no matter your budget, but know that a post or a tweet won’t be enough to ensure you have a fantastic retirement. Only a solid financial plan will. So make it a priority to get quality advice as early as possible.
This article was originally published in The Star. Lesley-Anne Scorgie is a Toronto-based personal finance columnist and a freelance contributing columnist for the Star.
