Do You Need a Financial Advisor?
Key takeaways
Financial advisors take a comprehensive view of your situation and uncover opportunities and blind spots that might otherwise go overlooked.
A qualified financial advisor will meet with you to understand where you are and where you want to go.
A financial advisor can create a personalized plan that balances your needs today with your goals for the future.
It’s normal to wonder if you’re making the right decisions about your money. In fact, more than a third (36 percent) of Americans say uncertainty about their finances keeps them up at night at least once a month, according to Northwestern Mutual’s 2023 Planning & Progress study.
of Americans say uncertainty about their finances keeps them up at night.
–Northwestern Mutual’s 2023 Planning & Progress study
Whether you need help with your financial decisions or just want to know if you’re on the right track, advice from a financial advisor can help. You might be intimidated or think it’s only for the ultra-wealthy, but anyone can talk with a professional—and the process should feel empowering, with expert advice that helps you make informed decisions specific to your unique goals and circumstances. An advisor’s role is not to judge you but rather support your financial growth and point out details you might not have noticed.
Whether you’re just getting started or well on your way, an advisor matched to you can help simplify financial concepts, set achievable goals and build a personalized plan that aligns with your aspirations. Working with a financial advisor is a valuable partnership that can positively impact your and your family’s lives—and may even help you sleep better at night.
We’ll help you understand everything a financial advisor does and why hiring one may be a good idea.
What does a financial advisor do?
A thoughtful financial advisor will start by getting to know you as a person by asking questions and listening closely to understand how you approach money and then help you identify goals. You’ll discuss options designed to take you where you want to go and how you can update the plan when your life changes.
The first discussion with an advisor is typically an informal conversation in which you’ll share your priorities and current financial picture, like income, assets and any debt you have. Your advisor will want to learn what you’d like to accomplish with your money—and when. Then they'll work with you on a plan that details how to get where you want to go. Your Northwestern Mutual advisor will rely on our exclusive portfolio of solutions designed to meet you where your needs are and address every side of your life.
When the right plan is implemented, it can work to deliver better financial outcomes and stability. The objective is to help you feel confident with a personalized set of solutions that balance today’s needs with your goals and can adapt to life’s twists and turns.
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Why is it important to have a financial advisor?
Working with a financial advisor can be good for your financial and emotional health. Results from Northwestern Mutual’s 2023 Planning & Progress study indicate that those who work with a financial advisor and those who consider themselves disciplined financial planners are more likely to report greater feelings of strength about the current state of various aspects of their lives, both personal and professional.
Research also shows that people who work with an advisor are significantly more confident in being prepared for unplanned expenses, the ability to retire when the time comes and achieving long-term financial security.
Financial advisors can also connect you with a network of other professionals that can be critical to your plan, like attorneys or tax professionals, to ensure that all sides of your financial life are coordinated.
Can I rely on financial advice from family or friends?
Ideas and suggestions from your family and friends might be convenient, and it might even be great advice. But our financial advisors are professionally trained to ask the right questions about your financial situation and goals. Your answers enable them to take a holistic view of your financial life and make tailored recommendations based on that broad understanding.
You might also feel that money is a sensitive subject, but with your advisor, you can always speak honestly and confidentially about topics that may be difficult to discuss, like debt. Our advisors will speak objectively with you and make judgment-free recommendations.
Can I get enough financial information online?
A never-ending amount of free advice is available online. (You’re reading some right now.) These can be reasonably good sources of basic definitions and initial primers on financial topics. We happen to think our articles, quizzes and finance fundamentals are quite insightful, but they’re no substitute for personalized financial advice from a professional.
Online advice isn’t truly tailored to your situation like guidance from a human advisor is. A professional financial advisor knows you personally and can give specific suggestions that make sense for your situation. In the same way you might search online about some medical symptoms but then talk with a doctor or nurse, a financial expert relies on training and experience to help you make big financial decisions.
Some advisors have designations (those letters following their name or title). These may represent educational degrees, additional training or industry certifications. For example, the CFP® or CERTIFIED FINANCIAL PLANNER™ designation is awarded to individuals who successfully complete the CFP Board’s initial and ongoing certification requirements.
When does it make sense to hire a financial advisor?
The general answer: anytime. There’s no bad time to get a plan in place. But financial advisors can be especially helpful when you’re faced with a life change. They are highly trained to help you through significant financial milestones like these:
- Funding college
- Marriage
- Buying a home
- Adding to your family
- Changing jobs
- Retirement
- Handling a lump sum like a bonus or inheritance
How much money do I need to have a financial advisor?
There is no set income level for getting a financial advisor—anyone can (and should) consider financial planning. Simply put, financial planning is for nearly everyone because most people can benefit from working with a professional to create and implement a financial plan. That’s true no matter how much money you have or what you make. And in many cases, you can work with a financial advisor with no out-of-pocket cost. It’s less about specific numbers and more about finding the right advisor for you.
How much does it cost for financial advice?
How much an advisor makes and how they charge you for services varies by advisor. Three common ways financial advisors can get paid include charging you a flat fee, charging a percentage of the assets they help manage for you, and/or getting commission from any products or services you buy. A commission typically means there’s no out-of-pocket cost to you.
When you meet with an advisor, go ahead and ask how they make money. Understanding how they are compensated and the pros and cons of different types of compensation is important for building trust.
Take the next step.
Your advisor will answer your questions and share insights you never knew you needed to get you to your next goal. And the next.
Let’s get startedHow to find a financial advisor
There are many ways to find an advisor. You can do an online search or talk with people you trust and get a referral. If you’d like to get matched with a Northwestern Mutual financial advisor, you can use our online matching tool. You may also ask other professionals you trust, like your accountant or attorney, as a starting point. Seek at least two or three referrals, review their background online, and arrange to talk in person or virtually to determine who is a good fit for you.
When you’re talking with a new financial advisor, bring digital copies or printouts of some of your financial documents to discuss when you’re ready. Questions you may want to ask include:
1. What do you consider a good financial plan?
2. How often do you plan to meet with me?
3. How will you get paid?
4. What’s your investment philosophy?
5. Who else will I be working with?
Why should I work with a financial advisor from Northwestern Mutual?
When you first meet with an advisor, they will get to know your goals and learn about what you’re already doing. Then, together, you and your advisor will build a plan based on your unique situation that strategically leverages a range of financial options like insurance, investments and annuities.
That’s because this multifaceted approach can lead to better outcomes—and a study by EY has demonstrated it. Their analysis shows that when you properly allocate your money across a range of financial options, including investments, permanent life insurance and deferred income annuities, you’re more likely to outperform strategies that emphasize investments alone over the long term. We think about growing your wealth and helping you protect it. But the work doesn’t stop there.
Life can have surprises in store, so your goals may change, or you might face a new challenge. You’ll regularly meet with your financial advisor to make sure your plan still fits you and, if it doesn’t, make adjustments to keep you on track. A financial advisor can help make sure that at any point in time, your plan is specifically suited to you and your needs. Your plan will protect you and help you thrive no matter what life throws your way.
Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete the CFP Board’s initial and ongoing certification requirements.
