When do you need a financial advisor?

Money matters, especially at certain times in your life, can feel overwhelming. And as life gets more complex, so do our finances.

But help is at hand.

Whether you’re buying your first home, planning for long-term financial security, or figuring out what to do with an inheritance, money can be tricky to manage. Getting some guidance could be the difference between a life of financial stress and one where you feel secure and set up.

This is when engaging a financial advisor could really help. Here’s what to consider if you’re thinking about going down this route – and how to find the right one for you.

What do financial advisors do?

Before we get to the when and who, let’s look at how a financial advisor can assist you.

In short, these are trained money professionals who help you create a financial strategy that supports the life you want to live – now and in the future.

They’ll guide you in growing your wealth and making confident money decisions, and can help with:

Investment advice and getting started.
Investment portfolio management.
Consolidating debt and superannuation.
Retirement planning and strategy.
Tax efficiency (often in partnership with your accountant).
Insurance and estate planning.
Inheritance management and investing.

Some advisors specialise in specific areas like shares or property, while financial planners take a more holistic view, helping with everything from wills and insurance to long-term retirement planning.

When do I need a financial advisor?

This is the golden question – and really, the answer is: it’s up to you.

If you feel confident managing your own finances and have clear goals, you might not need one right now. But for many of us – and I’d say most – money and how to invest it wisely can feel complex.

So, just like you’d hire an electrician to wire up your home, it’s completely reasonable (and smart) to engage someone who works with money every day.

While you can reach out to a financial advisor anytime, there are a few specific life stages when their guidance can be especially valuable. For instance:

Buying your first property – advice on boosting your borrowing power and how much of a loan you can realistically manage. Also assistance in finding the right broker or lender for you.
Having kids – working out strategies to save for their education or future.
Planning for retirement – working out how much you’ll need and how to get there (super contributions, investing, etc.)
Receiving an inheritance – managing or investing assets like shares or property.
Facing illness, divorce or life changes – estate planning and financially navigating a change in circumstances.

And then there are those more subtle moments when you just feel uneasy about money. Maybe you’re lying awake wondering:

I’d like to invest, but don’t know where to start.
I feel overwhelmed and need a clear plan.
What level of investment risk is right for me?
Should I hold, sell, or reinvest my current investments?
I don’t have time (or interest) to manage my finances – but I want to grow my wealth.

A good financial planner can help with all of this and create a strategy that suits your goals, risk comfort, and stage of life.

Most importantly, they offer peace of mind. Just knowing someone’s on top of your money can help you sleep better at night.

How to find a good financial advisor or planner

Choosing the right money professional for you is important.

Here’s what to consider:

1. The type of advice you need

Some financial advisors are like medical specialists – focusing on an area of expertise, such as investing in global shares, private credit or crypto. Others, such as financial planners, are more like GPs, helping with your overall financial health. Some planners also double as mortgage or insurance brokers. Who you choose depends on your needs.

2. How they charge

Advisors usually charge in one of three ways:

Fee-only – a flat fee or hourly rate, no commissions.
Commission-based – they earn by selling financial products.
Fee-based – a mix of both.

Many people prefer fee-only advisors and planners for their transparency. If there’s no commission, there’s less chance of bias. And remember, any advice fees are tax deductible.

3. They have the right credentials

In Australia, financial advisors must:

Hold a relevant bachelor’s degree (or higher).
Pass the Financial Adviser Exam.
Be licensed – hold an Australian Financial Services Licence (AFSL) or be authorised under one.

Always check credentials and licensing before committing. Dodgy financial advice is well, dodgy.

4. You feel comfortable

It’s also important to feel comfortable and confident with your financial advisor. It helps if you ‘click’ as people – after all, you’ll be discussing your financial situation and life goals in detail. You want the relationship to feel open, supportive, and easy.

Most planners and advisors are happy to have a ‘meet and greet’ so you can decide if you’re a good fit.