When You Need a Financial Advisor (& When You Probably Don't)

A few years ago I had kind of an epiphany during a first meeting with some potential financial planning clients.

The meeting started like most others, and the couple shared some areas they wanted to address – saving for retirement, combining finances as a soon-to-be-married couple, and setting aside money for travel. Those concerns are squarely in the financial planning wheelhouse, so it seemed like working with a CFP® professional could be a good fit.

So far so good; nothing out of the ordinary. The "a-ha" moment didn't come until the very end of our meeting.

As we were getting ready to end our conversation, one of them asked this excellent question:

"If we were your friends and came to you with these exact same questions, what would you tell us?"

Pow—what a great way to cut to the chase! Instead of describing all the great work we could do together, I had to stop and think about it in a totally different way. What would I tell a friend if we were having a conversation? After a brief pause to gather my thoughts, I gave them an honest answer.

"I would recommend that you pick one of the areas you want to address, give yourselves a hard deadline of 2-3 months, and see how far you get on your own. If you're able to check it off your list – or at least make meaningful progress – then you probably don't need my help on that issue. There's no need to pay me for something you can do yourself.

"But," I continued, "if you are stuck or struggling with the same decisions 3 months from now, that's a strong sign that you need outside help."

I think that’s really great advice.

Now don't get me wrong: I would have been very happy to work with this couple and, as I mentioned, a one-time financial plan would have been a good fit for the concerns they wanted to address. I want to help as many people as I can. If that means we work together to help you get on the right path for realizing your financial hopes & dreams, that's awesome. That’s what I want.

But if our initial conversation – or reading my newsletter or listening to this podcast – provides the spark that allows you to handle it on your own and we never work together, I still consider that a huge win. If there is something I know off the top of my head – whether that’s information or just a different perspective – and sharing it helps you take control of your financial life, I'm happy to give that away 10 times out of 10. If I have to pull out my calculator or my fancy software or build a spreadsheet, ok sure, I’m going to bill for that. But if all you need is a quick conversation to get on the right track, then I’m happy to have that conversation. Just hit me up sometime during weekly office hours and we can talk about it in plain language with zero pressure.

So with all of that in mind, today I thought I’d share a few common ways to know if working with a financial advisor would be a good fit for you.

1. There are things you know you should do that are within your power, but you haven’t done them. I’m going to be honest with you: it is very rare that I work on a financial plan where the problem is that the person I’m working with doesn’t have access to the information or tools required. What is much more common is that a person knows what they need to do, knows it is within their power to do it, but just can’t seem to make it happen. In those situations, a financial planner can help you see things from a different angle, act as an accountability partner, or come up with an action plan of best next steps so that you can actually start building some momentum in the right direction. 

2. Your financial circumstances have gotten noticeably better and you want to be sure you’re making smart decisions. I’ve seen this take a couple of different forms. The first is something like this: you’ve been doing your job or running your business for a while, usually 10+ years, and in the beginning when you weren’t really making any money, it was easy to make financial decisions. If you don’t have any money, you don’t have very many decisions to make. But now you’re ten or fifteen years in and you realize, hey, I’m actually making a pretty good income. But because you’ve been thinking about a million other things while your career or your business slowly grew, you don’t have any idea how to manage your financial life now that there’s a lot more money involved. The second version of this is usually from a one-time or short-term windfall, like receiving an inheritance or maybe you just got the advance from a book deal or, I don’t know, you won the lottery. Same situation as before: you’ve never had to think about what to do if you have a bunch of extra money, so how do you make smart choices when that happens? This is an excellent reason to work with a financial planner to make sure you are using your money wisely, saving the right amounts in the right accounts, and setting yourself up for greater financial stability and security.

3. You don't know the answer to this question: "am I doing ok?" We often talk about financial planning in terms of goals, what are your goals, what are your dreams, what’s your best version of your future life. And goals are great. They are super, super important. I think everybody should set and pursue big goals. But what if the issue is that you really, really want to make smart decisions with your money and you just have no idea how you’re doing or how you stack up relative to other people in your situation or stage of life? Now, “am I doing ok?” isn’t much of a goal, but it’s a surprisingly common dilemma faced by lots of capable and competent people who just need a little perspective. So questions like “am I saving enough”, “am I saving in the right accounts,” or “should I be prioritizing one debt over another,” fit into this category. I offer a service called financial coaching sessions that is all about helping you get oriented to your current financial reality so you can understand how you’re doing and know which areas need your attention.

4. You want to put your money to work for you, but the idea of managing your own investments is either overwhelming or uninteresting. I wrote a blog piece some time ago about a headline I read that used the phrase “stock market chaos”. Spoiler alert: my advice in that blog post was that you can almost always ignore financial media headlines, because they’re designed to drive engagement and not to make you smarter or a better investor. Anyway, my uncle wrote me a reply to that post to chime in about his own investing journey. And it's clear from what he wrote that he likes managing his own investments. It's fun for him. He likes that the ideas he implements are his own, even if they don't always go the way he wants. 

   
   

   And that's 100% great! If the process of managing your investments is personally rewarding, then you don't need to hire a professional to do it for you. You can buy yourself a few books, learn the basics, and do it yourself.

   
   

   But for everyone else – everyone who doesn't want to learn about the stock market, finds the whole thing pretty stressful, or would just rather focus on other things that are more interesting – having someone else do it for you is a big value add. If that sounds like you, then it’s worth having a conversation with a financial advisor to see if it’s a good fit. 

   
   

   (And just a little fyi – if an advisor says that they are fee-only, that means they never receive commissions or kickbacks from the investment products they recommend. I’m not saying that everyone who earns commissions is a bad person, but there is an inherent conflict of interest in those situations because advisors who receive commissions make more money by recommending certain investments. So if you want to minimize conflicts of interest, ask an advisor if they are fee-only when you meet with them for the first time.)

So those are four good ways to know if having a conversation with a financial advisor is a good idea for you. There are certainly others, but those are the ones I see most often. 

And there is no right or wrong here. Not everyone needs to work with a financial advisor or have a professional manage their investments. Some people find a lot of satisfaction doing it for themselves, others find none. I like to use this analogy: some people love home improvement projects or mowing their own lawn or whatever; other people would much rather pay for someone else to do it for them. One approach is not better than the other, but one will probably be better suited for you.

So if you’re navigating a financial problem, question, or concern and want to know if reaching out to an advisor is a good next move, I suggest you try the approach I mentioned earlier:

• Pick one area that you want to improve

• Set a deadline (I think 3 months is a good target)

• Then make the best decisions you can, stick with it for those 3 months, and see where you get

If the problem is resolved (or if you are confident that you are on the right path), keep going! You're doing great! Pick another thing you’d like to address and repeat this process.

If you instead find yourself stuck or feel in over your head at the end of those 3 months, consider it a strong sign that you might not be able to untangle this issue on your own. It could be time to find out how working with a financial advisor can help.

If you try this process, please let me know how it goes! I'd love to hear your success stories. Or, if you need some guidance or want a second opinion, I'd also love to have a conversation to explore how working together can help you get on the right track.

Onward & upward!

Thanks,

Timothy Iseler, CFP®

Founder & Lead Advisor

Iseler Financial, LLC | Durham NC | (919) 666-7604

Iseler Financial helps creative professionals remove stress while taking control of their financial lives. We'll help identify current your strengths and weaknesses, clarify and refine your long-term goals, and prioritize decisions to improve your financial well-being now and later. Reach out today to take the first step.