I’m 27 and made $153k this year. Should I get a financial advisor?

A financial advisor can be a useful resource, but they aren’t for everyone. That’s why a 27-year-old who makes $153,000 per year turned to the Financial Planning subreddit for advice. The individual is wondering if a financial advisor makes sense for their situation, and the community was quick to offer their thoughts.

The Advantages Of A Financial Advisor

The top comment shared some of the perks of working with a financial advisor while highlighting some details to keep in mind before working with an advisor.

“A good financial advisor is an asset. The operative word there is good. There’s more to financial success than just investing. Tax planning, family planning, retirement planning, and insurance aren’t one-size-fits-all elements of your financial life.”

While it’s easy to buy an index fund and call it a day, your financial life consists of many moving parts. A financial advisor can walk you through each step and bring up details you didn’t anticipate.

You can also turn to a financial advisor if you are stressed about market volatility and need a mentor to guide you along the way.

Another commenter is a fiduciary financial advisor who told the original poster that they are far too conservative by putting most of their money into CDs and cash. In this case, a financial advisor can help the original poster gradually get more comfortable with stocks and ETFs.

The Disadvantages Of A Financial Advisor

The first commenter said that you only get the benefits of working with a financial advisor if you find a good one. There are bad financial advisors who may give the wrong advice or serve their own best interests instead of yours. That’s why it is important to work with fee-only fiduciary advisors. If you want to work with an advisor who receives commissions, then that advisor will promote financial products that give them commissions. They may steer you away from superior financial products that don’t give them commissions.

A financial advisor can also get expensive, especially if you give them a management fee equal to a percentage of your portfolio’s value. Their expenses can minimize your total returns, and you can just invest in an ETF that mirrors the stock market.

The Verdict

It’s different for each person, but it’s important to know which variables play a role in the final decision. Investing can be straightforward if you stick with ETFs, but one Redditor mentioned that there is so much more to financial advisors than managing investments.

The simpler your finances are, the easier it is to do it yourself. However, if you are getting into complex strategies like tax optimization and aren’t sure what to do, a financial advisor can actually end up saving you money.

You can also meet with financial professionals who assess your situation every few months instead of committing to a regular financial advisor. This approach can ensure you are receiving some professional oversight without the long-term commitment of working with a financial advisor.

If you aren’t sure what to do, you should interview some financial advisors anyway. These interviews will help you decide if you want to work with a financial advisor and narrow it down to the right advisor for your needs.

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