Is a financial advisor right for you?

Building a financial plan to help ensure your savings and assets track with your short- and long-term financial goals is a lot like auto maintenance and repair: You want your car to run well and last many years. You can put in the research and effort to work on your car yourself, or you can hire an auto mechanic to keep your car running smoothly and take care of any issues that come up. For some people, a do-it-yourself approach is fine. Others may not have the time or know-how to do so. Financial planning works the same way—you may want to manage your financial plan yourself, or you may want to hire a professional financial advisor to help.

Is a financial advisor worth the investment?

Many people don’t seek the help of a financial advisor until a specific event—such as the sudden inheritance of a large sum of money—prompts them into action. However, there are many reasons why working with a financial advisor before a specific event occurs may be right for you. If one or more of these statements applies to you, you may benefit from working with a financial advisor:

• My finances are complicated. I have multiple savings, investment, or retirement accounts, have multiple sources of income, own or rent more than one property, or have a variety of assets.
• I don’t feel comfortable managing my investments.
• I have had a recent life event, such as a marriage, divorce, or the birth of a child.
• There has been a change to my financial situation, such as a new job, loss of a job, or a recent inheritance.
• I’m nearing retirement and am concerned about making my savings last.
• I need help with my will and estate planning.
• I have limited time or knowledge to manage my finances.

How can a financial advisor help?

Whether you’re looking for guidance on a specific financial goal or issue or would like an overall financial plan, financial advisors can provide guidance on a range of topics, including savings, investing, insurance, tax preparation, and retirement and estate planning. Some advisors specialize in one or two of these areas, while others can provide guidance on multiple financial topics. They can help you on an as-needed basis or for your ongoing needs to:

• Get a big picture analysis. An advisor can help you develop a comprehensive personal financial plan that addresses everything from short-term savings to retirement savings to estate planning.
• Define your savings goals. It’s easier to get motivated about something when you have a goal to work toward. So instead of just “saving,” you can work with an advisor to come up with short- and long-term savings goals that include specific dates and savings targets.
• Create an investment profile. An advisor can work with you to set up an investment strategy based on your goals, time horizon, and risk tolerance.
• Select the appropriate insurance. If you’re not sure how much life, home, or auto insurance coverage you may need, an advisor can make recommendations on products and amounts.
• Plan for retirement. An advisor can help you select the appropriate retirement savings vehicles for your situation and create a contribution, investment, and withdrawal strategy.
• Create an estate plan. It’s important to specify how your estate will be distributed upon your death. Your “estate” can include everything from legal rights to real estate to benefits and investments. Because there are many legal complexities and potential penalties when it comes to your estate, having a financial advisor assist you can be beneficial.

Before you invest in a financial advisor, ask yourself what you’d want to get out of working with one and if you’re ready to listen to and take his or her advice. It also helps to know the different ways financial advisors are compensated, so you can choose a fee structure depending on your needs. Fees can be based on a percentage of your account value, commission-based (paid based on third-party investment products sold to you), hourly, flat, a combination of general fees and commission-based, or a quarterly or annual retainer fee for ongoing advice.

How do you select a financial advisor?

If you’ve made the decision to work with a financial advisor, your next step is to carefully consider who you’ll work with. This is someone you’re trusting with your money, so take the time to choose a good fit. Interview multiple candidates, conduct a background check, and consider pay structure.

Did you know?

As a Hewlett Packard Enterprise employee, you can work with a Fidelity Workplace Planning Consultant for free to help you develop a savings and investment plan based on your personal situation. Just call the Hewlett Packard Enterprise Benefits Service Center at Fidelity at 1-800-409-4015 from 7:30 a.m. to 11:00 p.m. CT or make an appointment to get started.

Information was provided by Hewlett Packard Enterprise. Fidelity Investments is not responsible for its content.

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