Do You Need a Financial Planner? Here's How to Know—Plus How to Find One

A financial planner might be just what you need to make sense of your money right now.

financial planner or advisor guide - money tree on red background
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If you've been wondering about how to up your money game or how to guard your financial future, you've likely wondered about the services offered by financial planners or advisors. Whether you're on track for a solid retirement or still in the beginning phases of paying down debt, establishing an emergency fund, and developing a healthy relationship with money, a financial planner can help.

Now may be a better time than ever to start working with a financial planner, but do you really need one? How much do financial planners cost, and how much can they actually help you? Find some answers here, plus a look at how to find a financial planner or advisor who fits your needs.

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Do you need a financial planner?

Single or married, well-off or struggling, everyone can benefit from having a financial planner in their lives. But is it really worth it to shell out the cash to pay for one? Millennial personal finance author Stefanie O'Connell says maybe not.

"When you're just kind of starting to pay attention to your money, focus can be on behaviors that you can do yourself," O'Connell says, "things like contributing to your employer's retirement plan, saving money in [an] emergency fund, having a budget, and learning to live within your means. The kind of a basic groundwork."

If you're doing all those things and you're decades away from retirement, you're ahead of the game, O'Connell continues. At that level, hiring a financial planner to help keep yourself accountable as you budget and save would just be earning bonus financial-savviness points.

Kenneth Lin, founder and CEO of Credit Karma, agrees. "If you are confident with your skills and knowledge when it comes to budgeting, retirement planning, and investing, you may not need a financial advisor," he says. "If you are willing to take the time to read up on personal finance, make sure your retirement savings and investments are on track, and work to achieve other financial goals, you may be just fine managing your money yourself."

But if you struggle to do those things, you might benefit from a little help. Read on.

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How do you hire a financial planner?

Calling a financial planner in for help is best when you're about to make a critical financial shift, according to O'Connell. That might be when you're planning a wedding or looking to save up for a home. Maybe you're about to have kids and you want to get them off on the right foot with a college savings plan, or you've recently gotten an inheritance. A financial shift could also be necessary when something has gone wrong: Maybe you're going through a divorce or your spouse has passed away.

"There are just a lot more ways to optimize at those stages," O'Connell says. "And the intersection of legal considerations, financial considerations, wealth considerations, and tax implications really require a level of expertise."

If you are married or have combined your finances with your partner, you should plan to attend financial planning sessions together and keep each other in the loop. That way, you're both buying in on major decisions and both have an understanding of how your finances are working.

"All financial stakeholders should be included in the financial planning," says Bobbi Rebell, a CFP and personal finance expert at Tally. "A good financial planner will want to make sure that is happening."

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How do you find the right financial planner?

If you're ready to take the plunge and start working with a financial planner, here's where things can get overwhelming. Like tax accountants or hairdressers, there are tons of options, but the tricky part is finding a financial planner or advisor who's perfect for you and your situation. You want someone with the financial savvy to help guide your budgeting, saving, investing, and more, but you also want someone who understands the human aspect of money—that is, they won't judge you for an unplanned splurge or poor financial decision.

O'Connell suggests looking for a certified financial planner (CFP), someone who has gone through additional training and testing to become certified. Rebell adds that CFPs are held to certain ethical standards. You can find one at Let's Make a Plan, a website from the CFP Board of Standards.

While you might consider starting your search at your local bank, O'Connell says that word of mouth and personal recommendations also work. Given the digital nature of the position, you don't have to limit your search to professionals in your area. Many financial planners work with remote clients through virtual meetings. If you need help, she suggests a site like XY Planning Network to get started.

And don't underestimate the importance of getting along with whoever you hire. Lin says shopping around for an advisor can ensure a good fit over the long term. "The key is to trust your financial advisor. Even if they are not actively managing your money, they will have access to your sensitive financial information and will be giving you advice that could shape your financial future," he says. "You need to know they have your best interest in mind."

If a planner has an online presence, you can vet them by scouring their blogs and the kind of value they provide through free online content. "You want to get a good feel of their approach and their value system," O'Connell says. "You want someone you can feel safe with, someone who isn't judging your life choices."

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How much does a financial planner cost?

The cost of a financial planner depends on how the financial planner makes money. Rebell suggests looking for fee-only financial planners, or ones who work for fees or hourly rates. "This is where it gets important to ask your financial planner how they are getting paid," she says. "It can appear to be 'free' if the planner is being paid by commission when you buy a product from them. But if they are a fee-only planner, it can vary widely depending on factors, including their experience, their costs, and the budgets of their clients."

A fiduciary planner is legally bound to act in your best interest and put your needs before theirs, O'Connell says. "They're also known as fee-only advisors because they don't accept commissions on investments or products they recommend," she adds.

A non-fiduciary advisor can make money one of two ways: by taking a percentage of what your investments make or by getting a commission based on the products they sell (even if those products aren't a perfect fit for you). "That's a bit of an outdated model, and fiduciary is increasingly the standard," O'Connell says. "That's something that's really been driven by the younger generation."

To find out if an advisor is a fiduciary, Lin says to just ask. "For those who don't feel as financially savvy, a fee-only financial advisor could be the best choice, because those advisors generally have less of an interest in selling you something you don't need or pressuring you to invest more money than you're comfortable with," he says.

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What will your financial planner do?

Once you've linked up with a good fit, the frequency of your meetings and the length of your relationship depend on the complexity of your financial situation. "It depends on your needs and your budget," Lin says. "If your finances aren't too complex, maybe a yearly meeting does the trick. If you prefer more regular input, or have a more complex portfolio, and you can afford to continue to pay an advisor, you may prefer to have that resource available long-term."

You can also hire a financial planner for a one-time consultation if you're just looking for input on a specific question, like what to do with a large bonus or how to allocate a big raise (or adjust to a loss of income or layoff). To make infrequent consultations easier, Rebell suggests establishing a relationship with a financial planner or advisor you can reach out to in a pinch, even if you aren't meeting regularly.

"Even if you don't want extensive help with your money, there's no shame in hiring a professional to help lay the foundation for a path toward your ideal financial future," Lin says. "Just make sure to pick an advisor that puts your needs and goals first."

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