When It Pays to Hire a Financial Planner

NEW YORK (MainStreet)—A financial planner can prove to be an invaluable asset for individuals or families looking to get their financial houses in order. Not all matters require the consultation of an advisor, but in certain cases it can be beneficial. Here are a few situations where it can pay to hire an expert.

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Skill Gap

Bringing in the assistance of a financial planner is a smart play if you have already come to the conclusion that financial planning just is not for you. "If you want a financial planner that is going to manage your money because you have no skill or interest in doing it, that's O.K.," said Neal Frankle, a CFP and founder of Wealth Pilgrim. "That person's strategy should match your own risk tolerance."

Once you have decided to outsource your financial planning, Frankle emphasizes the importance of finding a planner that will work with your best interest in mind. "It should be an independent planner," he said. "It also should be a person that asks their clients a lot of questions rather than filling them up with how great they are."

If you are a do-it-yourselfer and prefer to do the bulk of your financial planning on your own, it still may make sense to have another resource review your approach. "You can do it yourself, but you can also spend a lot more time and get it wrong than just by hiring someone who is really good at it," Frankle said.

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Life Events

A financial planner can turn out to be a lifesaver for individuals encountering life-changing events. "If you are preparing for a marriage or a divorce, you may need a financial advisor," said Lisa Fox, a CFP and director for financial planning at South Texas Money Management. "I work with a lot of divorcees that have never had anything to do with finances before and have no idea of how to manage an investment portfolio or even how to manage their budget."