While some of us may be fine managing our own finances and investments, most of us can benefit from some type of professional help. The goal of any financial advisor is to help you define and build your wealth, regardless of whether you are recovering from bankruptcy or been saving frugally for the last 25 years. A good financial advisor will help you establish and follow the best road-map for you.

Tips on How to Choose a Financial Advisor

ALSO READ: Buy And Hold Investing: The Advantages & Disadvantages

It is crucial to be able to speak comfortably with your advisor about your goals, needs and different products to be able to make the best decisions possible. Because at the end of the day – whether you decide to manage your finances yourself or use a specialist – our mission at Wall Street Survivor is to give you the tools to understand the fundamentals (and beyond).

So how does a Financial Advisor add value to your life?

A good financial advisor makes you question your financial goals and may address some of the questions we ask you at the end of this section.

A good advisor will also help you achieve your financial goals while keeping your risk tolerance and time horizon in mind. And they do all of this for free.

Wait, did you say financial advisors work for free?


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Well no, not exactly. Financial advisors earn a commission when you purchase investments (mostly mutual funds) from them. The commission rate is based on a percentage of your investment, so you should use your discretion when choosing how much to invest. Watch all investment recommendations very, very closely.  

Back to our Main Questions: Do I Need a Financial Advisor?

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Here are 3 signs that you could probably benefit from a financial advisor:

1. You are constantly in overdraft
Are you a spontaneous spender? Does your bank account show a negative balance even though you have a stable job? This is prime time to see a financial advisor, who will help you create a manageable budget that helps you pay down your debt or invest accordingly.

Being in a constant state of overdraft is the single biggest sign that your personal finances need help, especially if you have a stable source of income. It would be rather futile to deny your need for help when you constantly spend more than what you earn. If this has become the norm rather than the exception, a financial advisor’s insights would be helpful.

When it comes to learning how to fix and fortify your personal budget in order to get out of a constant state of overdraft, a financial advisor is your single biggest ally.

2. The case of the reappearing credit card balance 

Do you wonder why your credit card balance never seems to budge? Or worse, it rises each month? Until you understand the consequences of compounding interest, you may be plagued with never-ending credit card balances. You can consult with a financial advisor to teach you about debt management, and maybe debt consolidation. They can even get you a new loan with a lower interest rate to pay off your other loans with higher interest rates.

The ability to understand the math of compounding interest is something that financial advisors possess in abundant amounts. Because of their mastery of the mathematics behind your credit card balances, engaging the services of one will allow you to come up with the best possible tactics for negotiating a restructuring of your credit card debts.

Think of financial advisers as your financial “lawyers” or counsel that can help you arrive at a mutually beneficial restructuring of your credit card balances. This can help you finally retire or eradicate that pesky credit card balance.

3. Saving in your mind

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Do you dream of owning a car? A house? Sending your kids to college? These things do not materialize out of nowhere. They come from saving money. A financial advisor will work with you to create a schedule where you can take care of your expenses and save accordingly to achieve whatever it is that you dream about.

The savings plan that a financial planner can prepare for you is one that is realistic. So you can finally take your dream savings from you mind out onto paper. It’s easy to fall for the fallacy that says what your mind can conceive you can achieve. When coming up with a savings plan on your own, the risk is high that you are predisposed to being too optimistic. Because financial advisors are detached from your personal finances, they can look at your situation objectively and prepare a financially realistic savings plan for your financial goals.

Here are Questions to Ask a Financial Advisor

Shop around for a good financial advisor. A time will come when you will be relying on this person for advice like a family member. Think about:

  1. Did she ask me the right questions about what I want?
  2. Did she listen to me and offer answers based upon what I was talking about?
  3. Did she immediately start talking about mutual funds even before we discussed savings?
  4. Was she impatient to get the interview over?
  5. Did she want me to sign documents right away?
  6. Did she offer any sort of relevant advice to get me started?
  7. Was she too pushy?

Three steps to prepare you for questions to ask a financial advisor

Step One:  Write down the answers to the following 6 questions

  1. Where do you see yourself financially 2, 5 and 10 years from now?
  2. What’s your idea of a comfortable retirement?
  3. What kind of house do you see yourself in?
  4. Are you willing to risk financial security for a chance to earn more?
  5. How much money is enough for you?
  6. Do you need to consider your children’s education?
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Step Two: One of the most important things you can do before talking to a financial advisor is to learn his language. Read this article on Understanding Stock Market Jargon, and you’ll have a better understanding of financial lingo.

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