If you have a job that offers a steady paycheck, are saving for retirement (and maybe some other goals) but want to be sure you’re on track to meet your goals, it could be time for a financial planner.  If you’re 10(ish) years out from retirement and aren’t sure you’re saving enough or going to be able to make your money last as long as you do, it’s likely time for a financial planner.  And, at any point along the way, if you’ve got money questions that are weighing on your mind, keeping you up at night or stressing you out, it’s probably time for a financial planner.

A study by researchers at Cirano and the University of Montreal found that people who worked with financial advisors accumulated 290% more in assets over 15 years than investors who didn’t receive professional guidance, in part because of their investment performance but also because they saved at a higher rate than people who weren’t working with an advisor.  (Note: The terms planner and advisor are pretty much interchangeable.  Neither is a designation, although a very common and comprehensive designation to look for is the CFP or certified financial planner.)

But that doesn’t mean putting someone on your permanent payroll is necessarily the answer.  The shape of your relationship with the person or company giving you advice should really depend on what you’re trying to accomplish.

Advice vs. Advisor

“Many of the clients we see are looking for advice rather than an advisor,” explains Cynthia Loh, a former vice president with Charles Schwaub. “I liken the difference to going to the gym rather than hiring a personal trainer.” When you go to the gym, you may have a question about how to use a particular piece of equipment or what you’ll get out of a particular class. But mostly you drop in and work out in a self-directed way.

“When you hire a personal trainer, however, you’re making a commitment about making a change for the long term,” Loh says. “You want check-ins. You want to make sure you’re on track in an ongoing way. It’s often during big life moments that we see the desire for advice become a desire for an individual to help with planning.”

In other words, a financial planner can help direct you in a more step-by-step way, with boxes to check to make sure you’re on the right track, year after year. The best part? Although some planners have required minimums to onboard a customer, you don’t have to have millions in assets in order to work with someone. Nor do you need a complex financial situation to benefit from working with a planner. In fact, the earlier you get started working with someone you trust (perhaps even just in the form of a yearly financial check-up), the sooner you can begin making savvy financial decisions that will help you build a secure financial future.

What A Financial Advisor Can Bring to The Table

Financial planners can offer investment management advice, retirement and tax planning guidance, estate planning help, and more. They can also help you gain a better understanding of your risk tolerance as an investor. Most importantly, advisors can serve as a trusted sounding board for all of your major financial decisions, including how to invest for your specific goals and time horizon, and how and when to start drawing down on your accounts in retirement, among other things.

A good financial planner can also help you develop good financial habits that can last a lifetime. For example, you can work together to build up an emergency savings cushion, make the most of year-end tax moves, and take advantage of every employee benefit available to you, such as an HSA or FSA, or a 401(k) or 403(b), all of which have tax and money-saving advantages. (Importantly, though, not all financial advisors do all of these things.  As you start to search for one, you want to get a clear understanding of what’s on their menu — and what’s not.)

They can also help you juggle competing priorities — such as paying down debt while saving for college, or paying for care for an elderly parent while also investing for your own future. And, they can prevent you from making emotional mistakes that derail your financial progress.  We all have many money goals, and a planner can help you adjust your financial plan through major life changes, such as welcoming a new baby, or moving to a new state.

How much will I spend to hire a financial advisor?

When shopping for a financial planner, you need to understand a) how planners are compensated and b) how much the relationship is likely to cost you each year.  It can be a confusing landscape.  Some planners charge a fee based on the assets you have them manage for you called AUM or Assets Under Management (the fee is generally around 1%). Others earn commissions based on financial products they recommend or sell. Still others charge a fee for the plan, or a monthly or quarterly fee.  Once you understand how they’re paid, it’s easier to compare.

Many advisors are happy to offer flexible arrangements for ongoing planning to make their fees affordable — just ask. If you opt to hire a planner who charges a fee based on AUM, then what you spend for their advice may increase as your assets grow (some planners have sliding scales where the percentage you pay them goes down as the assets you accumulate go up.)  But don’t let this stop you.  Growth in your portfolio is a good thing.

Money Management is a Marathon

 Many people who work with advisors would say that the financial planning fees more than pay for themselves. That’s because the planner can find ways to save you money every year, often with a few simple and immediate changes. Take your 401(k) plan as an example. Your planner could do an audit of your 401(k) and other investments and look for ways to reduce fees, build a better portfolio for your long-term strategy, save money on taxes, avoid duplication of investments, and find ways to save money on taxes, just to name a few.

Is it the right time?

Only you can know when you’re ready for a financial planner — if you’re ready to get serious about looking, here are a few places to start your search.  At Letsmakeaplan.org, where you can find a Certified Financial Planner or CFP.  At NAPFA.org you can find a searchable list of fee-only financial advisors.  At XYPlanningNetwork.com you’ll find a range of advisors who specialize in working with younger investors with different fee models.  And at GarrettPlanningNetwork.com, you’ll find planners who are willing to work by the hour. You can filter these sites for someone in your area, who has the expertise you need.

If you’re not interested in hiring a financial planner right now, you can still benefit from low-cost resources and tools designed to help you build a solid financial foundation, change behaviors and reduce money stress. There are countless free money resources available, such as those from the Consumer Financial Protection Bureau and Investor.gov. There’s also the Finance Fixx small group coaching program that can pair you with a dedicated coach and a team of accountability partners to walk you through the ins and outs of saving more, spending less, paying down debt and starting to set some achievable goals.

from our partnership with HerMoney/Filene