Do I Need a Financial Planner? - SmartAsset (2023)

Do I Need a Financial Planner? - SmartAsset (1)

A financial planner can be a powerful force for good, helping you set and reach financial goals. But do you really need a financial planner? Many people forgo the option of working with a financial planner in favor of doing research on their own, setting their own goals and managing their own finances. That means whether or not you should work with a financial planner is something that only you can decide. However, it’s important to understand the benefits and drawbacks of this decision before you make a final choice.

Interested in getting comprehensive financial help?Use SmartAsset’s free financial advisor matching tool today.

What Is a Financial Planner?

Simply put, a financial planner is exactly what it sounds like. You can work with a financial planner to set financial goals, work towards specific milestones, save for retirement, plan out your investments and much more. However, not every financial planner is created equal, and some may also double as financial advisors.

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Here’s a breakdown of some common services offered by financial planners:

  • Tax planning
  • Retirement savings and income planning
  • Estate and trust planning
  • Business succession planning
  • College savings planning
  • Budgeting
  • Insurance and annuity planning
  • Short- and long-term financial goal planning

Some financial planners may be more qualified than others, providing a wide range of services as mentioned above. They may also have financial certifications, such as chartered financial consultant (ChFC) or certified financial planner (CFP), that indicate specific areas of expertise. Others may operate on a more casual basis, providing financial advice and planning services for particular life events or milestones, such as figuring out how to invest an inheritance.

The Pros and Cons of a Financial Planner

There are plenty of benefits to working with a financial planner. At the top of the list is the simple fact that a financial planner can help you get into a better position with your finances. This is something everyone should strive for, and the help of a professional can make it even easier to achieve.

Whether you’re looking for help with your entire financial situation or just want advice regarding one area of it, a financial planner is often a great additional set of eyes. Even if you have a solid grasp on your retirement savings plan or the asset allocation in your investment portfolio, a financial planner may be able to see areas for improvement that you don’t, putting you at even more of an advantage. Additionally, if you’re starting with limited financial knowledge, a financial planner can help you with issues you may not even realize you have.

However, working with a financial planner or any similar professional is going to cost you. The more comprehensive the engagement is, the more you’re likely to pay. CFPs, due to their education background, experience and expertise, may cost even more than the standard planner. You also aren’t guaranteed to agree with what your financial planner says all the time, and there’s always the chance that they’ll have suggestions that don’t mesh with yours.

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Financial planning fees often come in two variants: fixed and hourly. These are fairly self-explanatory, with the former being a set fee and the latter being an hourly rate that changes based on the number of hours the planner spends on each client.

Do I Need a Financial Planner?

Do I Need a Financial Planner? - SmartAsset (2)

Again, it’s important to remember that only you can decide whether working with a financial planner makes sense given your financial situation. However, it’s definitely a good idea to consider a financial planner if you’re interested in getting help managing your finances beyond what you’re able to glean from internet research.

For example, if you’re trying to save for retirement but you’re having trouble hitting your savings goals, you might want to enlist some outside help in the form of a financial planner. They may be able to help you figure out how to adjust your habits to better reach your goals.

Another common instance in which someone would use a financial planner is if their finances become increasingly complex, to the point which they can no longer keep track of everything. In this situation, working with a financial planner can be extremely helpful in keeping your finances in order so that goals and financial obligations don’t slip through the cracks.

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How to Find a Financial Planner

There are several different ways of finding a financial planner or financial advisor that may work for you. A simple way of doing this is by using SmartAsset’s free financial advisor matching tool. This will pair you with up to three financial advisors who serve your area, with the final choice of who to work with being up to you.

There are also online databases that can help you find a financial planner. The best way of finding some of these databases if through a simple Google search. You can also use resources liketheFPA PlannerSearch and the Garrett Planning Network online databasesthat keep records of financial planners around the U.S.

Another tried and true method of finding a financial planner is by asking friends and family. Ask them if they use financial planners, and if they do, ask them about their qualities. Before you decide to work with an advisor referred from a friend or family member, make sure that they’re right for you and your financial situation.

Bottom Line

Do I Need a Financial Planner? - SmartAsset (3)

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Whether you need a financial planner is a decision that only you can make. That said, it’s a good idea to take a step back and think about the pros and cons of working with one, as well as if the costs of paying a planner make sense for your situation.

A financial planner may be able to help you set and achieve financial goals, allocate your assets, invest for the future and save for retirement. While financial planners and advisors do take fees, there are options for all financial situations.

Tips for Financial Planning

  • Financial planning isn’t easy, and it can be extremely helpful to have someone in your corner to help you out.Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • If you decide to do financial planning on your own without the help of a professional, there are a number of programs you can use. Check out SmartAsset’s list of the top financial planning software to learn more.

Photo credit: ©, © Trade, © Trade

Sam Lipscomb, CEPF® Sam Lipscomb is a writer for SmartAsset. His work spans a wide variety of personal finance topics with expertise including retirement, investing and savings. He is particularly well versed in credit cards. Sam has been featured in The Economist and on The Points Guy. He is a Certified Educator in Personal Finance (CEPF®). Sam graduated from Kenyon College with a degree in Economics and enjoys being a go-to resource for family and friends when it comes to personal finance. Originally from Washington, DC, Sam loves all things aviation and is a Cleveland sports fan. He currently lives in New York.


Do I really need a financial planner? ›

A financial advisor is worth the money if you are uncertain about how to manage your money, invest for your future, and take care of your family. Expert financial advice may be needed at various turning points in your life: when you have a child, get a promotion, or come into an inheritance.

At what net worth should you get a financial planner? ›

Depending on the net worth advisor you choose, you generally should consider hiring an advisor when you have between $50,000 - $1,000,000, but most prefer to start working with clients when they have between $100,000 - $500,000 in liquid assets.

Is it worth paying 1 for a financial advisor? ›

If you're already working with an advisor, the simplest way to determine whether a 1% fee is reasonable may be to look at what they've helped you accomplish. For example, if they've consistently helped you to earn a 12% return in your portfolio for five years running, then 1% may be a bargain.

Is it better to have a financial advisor or do it myself? ›

Some financial situations can be handled on your own, while others are best navigated in consultation with an advisor. Ultimately, the decision to work with a financial advisor or go it alone depends on a litany of factors, including your needs, goals and where in life you find yourself.

What is a normal fee for a financial planner? ›

Advisors who charge flat fees can cost between $2,000 and $7,500 a year, while the cost of advisors who charge a percentage of a client's account balance — typically 0.25% to 1% per year — will vary based on the size of that balance.

Why I dont need a financial advisor? ›

It will cost too much. People are often reluctant to pay for financial advice, thinking the cost will be too high or the advice not worth it. It can sometimes be hard to judge the value of paying for financial advice, as it is intangible and some of the benefits will only become clearer over the longer term.

Do wealthy people have financial planners? ›

Billionaires are in a class of their own when it comes to seeking financial planning advice. They aren't just millionaires with three extra zeros. Members of the 10-digit club require a more structured organization of professional advisors.

Is financial planner better than financial advisor? ›

For example, if you have short-term issues or need assistance with specific questions or investments, a financial advisor can usually be a big help. However, if you want support for developing a comprehensive long-term plan for your finances, you may be better off working with a financial planner.

Do I need a financial advisor if i dont have much money? ›

Even if you don't have a lot of money, financial advisors can be beneficial. If they're tax-savvy, they can suggest tax credits and other tax advantages you may qualify for as a low-income individual. These could include the saver's tax credit, the earned income tax credit, and more.


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