You probably don’t need a financial advisor if your finances are simple and you’re comfortable running them. You likely do when a decision gets large, complex or hard to undo, such as retiring, selling a business, exercising stock options or handling an inheritance. And you don’t have to hire someone forever: a one-time plan at the median price of $2,000 covers a single big decision.
Signs you can do it yourself
- Your income comes from a salary, and your savings are in a 401(k) or IRA and maybe a brokerage account.
- You’re saving regularly, have an emergency fund and no high-interest debt.
- You’re comfortable picking a few low-cost index funds and leaving them alone.
- You enjoy this, or at least don’t mind it, and you’d stick to the plan in a downturn.
If that’s you, learning a few basics may be enough. An hourly check-in now and then (median $300 an hour) is a cheap second opinion.
Signs an advisor will pay for itself
Retirement is within 10 years. Deciding when to claim Social Security, which accounts to draw from first, whether to convert to a Roth, and how much you can safely spend are choices with long-lasting effects. See advisors for pre-retirees.
You have stock options or RSUs. Timing an exercise or a sale can change your tax bill by a lot. See equity compensation specialists.
You own a business, or are selling one. Your business is likely most of your net worth, and the sale is a one-time event. See advisors for small business owners.
Your income is high but your plan isn’t. High earners often have the most options and the least time. See advisors for high earners.
Something big just happened. An inheritance, a divorce, a death in the family or a large windfall. Decisions made in the first months are often the hardest to undo. See divorce financial planners.
You’ve stopped trusting your own plan. If you’re unsure whether you’re on track, or you’d sell everything in the next crash, that’s a sign too.
You don’t have to choose all or nothing
| What you want | Option | Typical cost (US median) |
|---|---|---|
| A second opinion or a single question | Hourly | $300 an hour |
| A plan for one big decision | One-time plan | $2,000 |
| Ongoing help with everything | Ongoing planning fee | $4,500 a year |
| Someone to run the investments too | Percentage of assets | 1% a year |
These are the prices fee-only firms publish on their own websites, from the Wellspent fee report. Half of firms that state an asset minimum have none, so you don’t need to be wealthy to start.
What a good advisor does that’s hard to do alone
- Sees your whole picture at once: taxes, investments, insurance, estate, cash flow.
- Catches costly mistakes before they happen, such as a tax bill from selling the wrong account first.
- Keeps you on plan when markets fall, which is when most people lose the most.
- Coordinates with your accountant and estate attorney.
If you decide to look
Choose a fee-only advisor, paid only by you, so their advice isn’t tied to what they sell. Our guide to how much a financial advisor costs explains the pricing, and questions to ask a financial advisor helps you compare the ones you talk to.
How to start small
- Write down the one decision you’re stuck on. “When can I retire?” “Should I exercise my options this year?” “What do I do with this inheritance?”
- Book a one-time plan or a few hours with a fee-only planner who specializes in it. You’ll know quickly whether you want ongoing help.
- Bring your documents. Recent statements, last year’s tax return and any employer benefits summary make the first meeting far more useful.
A note on AI
AI assistants are a good place to learn, and to prepare questions for an advisor. They can’t see your full situation, take responsibility for a recommendation, or talk you out of a panic sale. Many people now use both: AI to understand the options, an advisor to decide.