This is part 3 of a 4 part series on investing:

  1. Why Should I invest?
  2. What’s the fee? We hear about fees all the time. What should you really look for?
  3. Options to DIY it: the pros, cons, and how exactly to get started.
  4. When should you bring in a professional? And how much do they cost?


I love fielding questions from readers (seriously love, so send them to me!). One of the most asked questions is around hiring a professional. Whether it’s because someone wants accountability, has very specific investing and financial planning questions, or is going into a new phase in their life. I get a lot of people asking how to even go about hiring someone to help with their money.

In full disclosure, Jordan and I manage almost all of our money ourselves. The only money that we don’t manage is a taxable investment account we have with Wealthfront, where we rely on the robo-advisor to manage the investments for us. We’ve talked about hiring a financial planner, and we may at some point, but at this point, we really enjoy managing money ourselves.

Though we don’t use a professional to help us with our finances, I completely see the benefit of a professional. If you have complicated questions, they can help you work through the right answers. If you have a partner that you manage cash with, they can help with money conversations. They can provide you with peace of mind that you’re making the right decisions.

And, most importantly, they can help keep you from acting rash.

Remember the financial crisis? As the stock market crashed I had numerous acquaintances sell all of their investments and keep their money in cash. Years later, once they started to trust the market again, they were buying into more expensive stocks. Selling low and buying high isn’t a winning strategy and if they had a financial professional talking them off the ledge, they may have acted differently.

But how do you get started hiring a professional and how much do they really cost? I spoke with two Certified Financial Professionals (CFP), Sophia Bera of Gen Y Planning and Shannah Game of Your Millennial Money to get the details for you.

PS: this is article #4 in a 4 part series on investing. Did you miss the first articles? Find them here:

  1. Why Should I invest?
  2. What’s the fee? We hear about fees all the time. What should you really look for?
  3. Options to DIY it: the pros, cons, and how exactly to get started.


When do you know you’re ready to work with a financial advisor?

Right after Jordan and I got married, we debated hiring a financial advisor. We heard that after a big life event it was good to get an outside opinion to help us craft a financial plan. Post-nuptials seemed like the perfect time to hire someone.

But is that right? Should you hire someone after a big life event like getting married or having a baby?

Game agreed that hiring someone to help you through life’s big transitions is a good idea. “The entry point is usually when you’re going through a life change. When you get married, are expecting a baby, want to start a business, get divorced, or when your parents pass away. You may even want to hire someone when you get a new job with a big salary increase, which is a great problem to have.”

Bera added that aside from life events, there may be other signs that you’re ready to hire a financial advisor. If you’re making six figures, that’s often a sign that you might benefit from some more complex tax planning. Or, if you have more than $1,000 per month that you’re able to invest, it might be time to work with a professional to decide how best to use it.

She says that there is a lot you can do on your own before hiring someone. “There are 3 important things you can do to build financial stability:

  1. Have you eliminated high-interest debt?
  2. Do you have 3 months of net pay in your emergency fund?
  3. Are you getting your company match on retirement or putting money away consistently for retirement?

These are things people can do on their own before they’re ready to work with a financial planner.”


What are the different type of advisors you can work with or hire?

I found this a little confusing. What do all of the different acronyms and credentials mean?

Game, a CFP,  helped break this down for me. A financial advisor is a general term that encompasses a professional that helps you with money. This can include stockbrokers, insurance agents, estate planners, etc. They may not look at your entire money situation and instead recommend investments and products based on just one or two of your financial goals.

A financial planner is a type of advisor who creates plans to help you meet your long-term goals. A Certified Financial Planner (CFP) completed training on tax planning, estate planning, life insurance, budgeting, and investing.

They look at your money situation from a holistic point of view.

Bera also described a CFP as a quarterback for navigating different money situations. They generally work with a network of other financial professionals and can recommend people to work with for estate planning, taxes, and insurance so you’re not relying on Yelp reviews.


What should you look for when hiring a financial advisor?

Bera advises that your advisor should be two things: Fee-only and a fiduciary.

Let’s break that down a little. Fee-only means that your advisor isn’t paid a commission or compensation based on product sales. So you know if an advisor is recommending a product or investment, they’re not getting a kickback from the company selling it.

Some advisors may say they are “fee-based.” This means they are likely getting paid from a combination of places: a fee from you, a percentage of the money they manage for you, or from commissions based on selling products.

Fiduciary means that the advisor is required to act in your best interest. There’s no conflict of interest. 

One common complaint of hiring a fee-only advisor is that they are more expensive than those that are compensated based on commission. This might be true, but it’s best to weigh the benefits of getting advice without conflict of interest (or with little conflict of interest) with the increased cost. If you’re weighing the pros and cons of fee-only, I found this article from Investopedia incredibly helpful.

Game broke down some questions you should ask before hiring anyone to help you with your money:

  • How are they compensated?
  • What does their typical client look like?
  • How long have they been in business?
  • What were they doing before becoming a financial advisor?


What’s the cost?

This, to me, was one of the most intimidating aspects of working with a financial professional. I didn’t know exactly how much they cost and whether the money being spent on a plan would be worth the investment.

Once I started looking into this I found that there are a lot of different ways financial advisors structure their fees and there are different levels of help (for different prices) that you can receive.

There are 3 main ways that an advisor will earn money:

Flat fee: an hourly or flat fee charged to you for planning services they provide

AUM: assets under management. Typically an advisor will charge 1% of the assets that they manage for you. So if you have $100,000 of investments with an advisor, you’ll pay $1,000 annually.

Commissions: payments from product sales or stock trades

One thing to note is that just like a robo-advisor, which will charge an annual advisory fee, if you’re paying an advisor a percentage based on AUM, you’re also paying the underlying investment fees. If you have $100,000 with an advisor who charges AUM and then invests it in a fund with a 0.25% expense ratio, you’ll pay $1,000 AUM plus $250 annually.

Bera has a variety of different options for clients. Her financial plan set up fee starts at $2,000 plus a monthly retainer of $215. For this, her clients get 3 virtual meetings per year plus unlimited email support.

For clients that aren’t ready for a full financial plan, she offers quick start sessions. In these sessions, she’ll answer your most important financial questions and give you a bit of advice to ensure you’re on the right path. These sessions are $600 for an individual (1-hour session) and $900 for couples (90-minute session).

If you’re thinking of hiring a professional, have an idea of how much help you’d like.

  • Do you want a quick meeting to ensure that you’re on the right track, or do you want someone to map out your full financial picture and help you make a game plan to meet your goals?
  • Do you want to manage your investments yourself, or would you prefer to have someone take that over for you?

Answering those questions will help you find services – for the right price – that match your needs.


What advice do they have for someone setting goals on their own?

Since I had two professionals on the phone who give great advice, I couldn’t help but ask them for their best piece of advice when it comes to setting goals. And, as expected, their advice was spot on.

Bera has an exercise that she advises everyone to do: envision that you were to inherit $100k. What would you do with it?

If a client was to say that they’d use $5k to go on vacation, she’ll ask what is stopping them from taking that dream vacation now? Is there something they can do now to work towards taking the vacation, without having to wait for that inheritance? She also says this is a perfect exercise to do with couples, so they can understand what luxuries they each prioritize.

Game suggests that once people are working toward financial goals, they really need to understand where their money is going. When you actually understand what you’re spending money on, you’re empowered to make choices. You can then make choices that have an impact on the big things you actually want to do with your life.

There isn’t one right way to do this. Try out different apps to track your spending. Or take a deep dive into your spending habits by printing out your bank statements and looking at what you spend line by line. Find the way to track money that works for you.

Want to connect with Sophia Bera and Shannah Game? You can find Sophia through her company, Gen Y Planning. You can find Shannah through her podcast, Your Millennial Money.

Well done, you have finished the 4 part investing series. Go back if you need a refresh,

  1. Why should I invest?
  2. What’s the fee? We hear about fees all the time. What should you really look for?
  3. Options to DIY it: the pros, cons, and how exactly to get started
  4. When should you bring in a professional? And how much do they cost

Photo by Green Chameleon on Unsplash

Erica Gellerman, CPA

Erica Gellerman Bio The Worth Project

Erica Gellerman is a CPA, MBA, personal finance writer, and founder of The Worth Project: a weekly money newsletter you actually want to read. Her work has been featured on Forbes, Money, Business Insider, The Everygirl, The Everymom, and Lifehacker. When she’s not writing about personal finance you can find Erica exploring Europe from her temporary home base in London.

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