When to Get a Financial Advisor and When It Might Be Time to Change

Most people don’t wake up one morning and decide they need a financial advisor. More often, the question arises gradually. Perhaps you recently sold a business, or inherited assets, or you simply don’t have time anymore to manage your own investments. The answer depends less on how much money you have than on what you’re trying to accomplish and whether you have the guidance to get there.

What does a financial advisor actually do?

A financial advisor helps you make informed decisions about your money, from managing investments to preparing for retirement. The scope of that advice varies considerably, which makes understanding the different types of professionals important.

Financial advisor vs. financial planner: What’s the difference?

Financial advisor can describe professionals who provide investment advice, financial planning, or other financial services. A financial planner typically focuses on your overall financial picture, helping you develop a plan that connects your investments with retirement goals, tax considerations, and future financial needs. Many advisors provide both services, so the distinction often comes down to the scope of advice rather than the title.

For individuals with more complex financial circumstances, trust companies may offer additional capabilities, including coordinating investment management with estate planning and trust administration.

Registered investment advisers generally owe clients a fiduciary duty, meaning they are required to act in your best interest. When interviewing potential advisors, it’s worth asking directly whether they act as a fiduciary at all times. Compensation matters too. Advisors are typically paid in one of a few ways: a percentage of the assets they manage, a flat or hourly planning fee, or commissions on products they sell. Each arrangement creates different incentives, so understanding how an advisor is paid is as important as understanding what services are included.

When should you get a financial advisor?

There’s no magic age or account balance that signals it’s time to hire a financial advisor. Often, the best indicator is that your financial decisions have become more complicated or you’re uncertain about the best path forward.

Perhaps retirement is approaching. Now you must shift from saving to figuring out how to turn those savings into income that will last the rest of your life. Decisions about Social Security, retirement account withdrawals, and taxes can affect your long-term financial security and working with a fiduciary greatly aides that process. An advisor can help you understand the tradeoffs before making decisions that may be difficult to reverse.

If you’re unsure whether your portfolio reflects your risk tolerance or whether you’re on track to meet your goals, an advisor can provide a broader perspective.

You don’t need to wait for a major event. Sometimes the clearest sign that you need a financial advisor is simply having important financial questions you’re not confident answering yourself.

When is it time to change your financial advisor?

Knowing when to change financial advisors can be hard particularly if you’ve worked with someone for years. A longstanding relationship has value, but it shouldn’t prevent you from asking whether you’re still getting the advice you need.

Before making a switch, consider scheduling a conversation focused on the relationship itself rather than your portfolio’s latest performance. Frame the meeting as a review of the relationship, not the returns, and come prepared to talk about the decisions you expect to face over the next several years and how your advisor would help you navigate them.

Then consider how you feel afterward. Do you understand the recommendations? Are your questions welcomed? Do you have confidence that your advisor understands what matters to you?

If you decide to change advisors, review your existing investments before transferring accounts. Some holdings may carry surrender charges or tax consequences, and a thoughtful transition can help avoid unnecessary costs.

The value of the right financial relationship

The right financial advisor does more than recommend investments. A strong advisory relationship helps you make decisions with greater confidence as your circumstances change.

At Nixon Peabody Trust Company, our approach to client service brings considerable investment experience together with broader financial planning and trust and estate considerations. We help clients evaluate important financial decisions in the context of their overall wealth strategy, finding guidance that fits your needs today and can adapt as your financial life evolves.

Learn more about our holistic financial planning services.

Frequently asked questions

Do I need a financial advisor if I already manage my investments?

Not necessarily. But investment management is only part of financial planning. An advisor may help with retirement income decisions, tax considerations, or estate planning that extend beyond managing a portfolio.

At what net worth should you get a financial advisor?

There’s no universal threshold. The complexity of your finances and the decisions you’re facing often matter more than your net worth. Some advisors have investment minimums, while others offer planning services for a fixed fee.

How often should I meet with my financial advisor?

An annual comprehensive review is a reasonable starting point. Major life changes or more complex financial circumstances may call for more frequent conversations.

Is it difficult to switch financial advisors?

Usually not, although some investments have transfer restrictions, fees, or tax implications. A new advisor can often help coordinate the transition.

Kyle C. Miller
Trust Administration Manager
+1 617.345.6052
kcmiller@nixonpeabody.com