When Should I Talk to a Financial Advisor?

We hear versions of this question often, especially from young professionals: How much money should I have before I start investing? When should I talk to a financial advisor?

You can have that conversation while you are still building your savings. It may be useful when you face a decision you want help weighing, such as whether to invest or pay down debt, how to use a retirement benefit, or what a change in your life means for your finances.

Key Takeaways

• You do not need to wait for a particular account balance to ask for financial guidance. Individual advisors may have different services and account minimums.
• A raise, inheritance, engagement, or new child can change several financial priorities at once.
• Before working with an advisor, ask what decisions they can help with, how they are paid, and how they approach investment risk.

Should I Invest or Pay Down Debt?

You have a budget and an emergency fund in place. Now there is money left over. Should you invest it or use it to pay down debt?

The answer depends on more than the amount you have available. The interest rate on your debt matters, as do your near-term cash needs, the time you have to invest, and any retirement match offered by your employer. Investing carries risk. Paying down debt reduces what you owe and the interest you will pay.

A financial advisor can help you compare those choices against what you want your money to do next.

What If My Financial Life Has Changed?

Perhaps you are earning a steady income for the first time, received a raise or inheritance, got engaged, or had a child. A change that feels exciting can bring several new decisions with it.

You might need to revisit how much you keep in cash, what you save for retirement, or who would be affected if something happened to you. You do not need a complicated plan for every life change. A conversation can help you see which decisions deserve attention now and which can wait.

How Should I Save for Retirement?

If your workplace offers a retirement plan, you may be wondering how much to contribute and which investment choices make sense. If it does not, you may be wondering what other options are available. Someone who is self-employed might have questions about a solo 401(k) or SEP IRA.

An advisor can help you understand the options available to you and how retirement saving fits with your current expenses and other goals.

How Much Investment Risk Makes Sense for Me?

Wanting a better return is understandable. It also helps to ask what could happen if an investment loses value, especially if you may need that money soon.

Risk is part of investing, but you should be able to understand the risks you are taking and why. If you are unsure what you own, how it could perform in a difficult market, or whether it fits your plans, those are good questions to bring to an advisor.

What Should I Ask an Advisor?

You can start with the decision that prompted the conversation. Then ask what kind of help the advisor provides:

• What would you help me work through first?
• Do you offer help with a specific planning question, or only an ongoing relationship?
• How are you paid, and are there account minimums?
• How would you help me understand the risks of a recommendation?

The answers can help you decide whether that advisor’s services fit what you need.

Additional Resources

• What Listening Changes explores why a financial conversation often begins with a question and then moves toward what matters around it.
• The SEC’s Conversation Starters offers more questions to ask an investment professional.

Continue the Conversation

If you are weighing a financial decision and would like to talk it through, we would be glad to hear what is on your mind.

Talk With the Conscious Wealth Team >>

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