fiduciary-financial-advisor

4 minute read

Fiduciary Financial Advisor: When to Seek Financial Advice

Are you at a point in your life where you feel it may be helpful to hire a financial advisor? Use our guide to determine if this is the right move for you.

Patrick Hicks

Patrick Hicks, @PatrickHicks

Head of Legal, Trust & Will

Finances can be complicated to manage, especially when planning for retirement, investing, or Estate Planning. Many people are not equipped with the legal or financial know-how to manage these tasks alone -- and that’s okay. Fiduciary financial advisors exist to help guide your financial decisions so you can manage your money in the best possible way. 

There are costs associated with financial advising to be aware of. Because of this, many individuals struggle with the decision to seek the help of a financial advisor. Keep reading to learn the signs that it’s time to consider hiring someone to help manage your finances: 

What Is a Fiduciary Financial Advisor?

A fiduciary financial advisor is a licensed professional trained to manage investments and financial accounts on behalf of clients. Services range from money management to retirement planning. 

Fiduciary financial advisors differ from financial advisors in terms of the level of responsibility involved. Fiduciary financial advisors are required to act in the best interest of the client, according to their fiduciary duty. This essentially means they put the client's interests above their own. A financial advisor is not held to the same standard. 

Another difference between a fiduciary financial advisor and a financial advisor is the cost of service. Financial advisors charge commission based on investment gains, while fiduciary financial advisors charge specific fees for their services.

What Can a Fiduciary Financial Advisor Help Me With? 

A fiduciary financial advisor can help with a range of financial services, depending on your specific needs and the type of advisor you choose to work with. Here are just some examples of what you can expect when working with a fiduciary financial advisor: 

  • Review your current financial situation

  • Discuss future financial goals and identify possible routes to achieve those goals

  • Create investment or retirement accounts on your behalf 

  • Buy or sell investments on your behalf

  • Develop a plan to manage long-term expenses, such as saving for a child’s college fund or creating a retirement account

  • Provide advice on financial obstacles or hardships

  • Assist in the Estate Planning process to help maximize family assets 

  • Determine the best type of life insurance 

When to Hire a Financial Advisor

Deciding when to hire a financial advisor will be a different process for everyone. Generally speaking, certain life events can trigger the need for professional financial advice or support. Here are a few situations where it may be smart to hire a fiduciary financial advisor: 

  • You recently inherited money or assets 

  • You want to begin investing, but are unsure where to start

  • Your employer offers a 401(k) and you want to compare options with a professional

  • You go through a divorce and need to re-manage your assets

  • You are considering starting or restructuring a small business 

  • You are approaching retirement and want to ensure your plans are in tact

  • You purchase a house or other investment and want long-term management advise

  • You want to create a Trust Fund or begin Estate Planning

  • You need to step in to help your parents manage their finances in old age

  • You need a second opinion on your financial habits and investments 

  • You want to create a college or medical fund for a child

In other cases, you may find you want to hire a fiduciary financial advisor without an outside event. Sometimes, working with a professional is a great option to receive a second opinion or guidance. The right time to hire an advisor depends on your financial goals and needs, but remember you can begin working with someone as soon as you feel the need. 

Should You Use a Financial Advisor?

You should use a financial advisor after evaluating your own financial know-how, and deciding whether you could benefit from professional support. This reflection is not always easy to do, but start by asking yourself how well you understand investments and wealth management. 

Review how much free time you have to research new investments as well. How often do you read financial news or educational guides? When investing it is important to stay up to date on the economy and market. Depending on your schedule, this level of involvement may not be realistic. 

Finally, determine how confident you are in your ability to achieve your financial goals. If you feel overwhelmed at the thought of retirement or creating a new investment account it may be time to use a financial advisor. 

Know that fiduciary financial advisors can work with you on both small and large tasks. You can consult an advisor about life insurance policies, or hire them to manage your entire retirement fund. The option is always there to help you make more informed financial decisions. 

Choose the Right Fiduciary Financial Advisor for You

A crucial part of the decision to work with a fiduciary financial advisor is determining how long you want to work with an advisor. Many fiduciary advisors are available for one-time or short-term consultations, while others specialize in full-time advising. Determine what you want to accomplish with a fiduciary financial advisor and research qualified providers in your area. 

Consider meeting with a few different advisors before deciding who to work with. Always ask questions about the fee structure and overall services. It is also a good idea to review an advisor’s availability, licensures, and past experience. If you are interested in learning more about how to choose a professional fiduciary for your estate, be sure to read our guide. 

There are numerous reasons why it might be time to work with a fiduciary financial advisor. Whether you are preparing for retirement, getting married, or even restructuring your regular budget there are qualified professionals who can help. Remember fiduciary financial advisors are not commission based, and they work to provide the utmost care when managing your investments.  

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