Financial consultant: do you need one?

Managing your money requires a lot of hard work and sometimes the help of a financial consultant. However, there’s a big problem that plagues the US: not many people actually know what these consultants are, how they work and how they can help with their financial health!

And the data gets even worse: Americans could be wasting a lot of their hard earned money because of this lack of knowledge. The National Financial Education Council reports that this costs about $1.200 a year to American households. Now we want you to imagine your life with an extra $1.200 every year to waste on whatever you want, wouldn’t it be cool? 

Then you should start studying personal finances and find out if a financial consultant is the solution for you. Keep reading to understand what this professional works with and the 10 signs you should take action and hire one. 

What is a financial consultant? 

A financial consultant is someone who studies personal finances for a living. Instead of letting their spending take control of their life, they take finances for a ride and learn how to manage household expenses and invest to get better results. The best part is: they can help almost anyone, as long as you choose the right professional, of course. 

Their main objective is to help clients understand the consequences of their financial choices. Let’s say you’d like to refinance a mortgage. This is the professional that will help you see if that’s actually beneficial (considering you’d reset your payment time) and which mortgage refinance rate is ideal. 

Most people call this pro when they come across an immediate financial problem. But everything in finance involves planning, so the best choice is to look for them years before a huge investment, such as buying a home or retiring. 

Financial consultant vs. financial advisor

Have you heard about a financial advisor? These two terms are incredibly similar, to the point of being used as synonyms by many advisors. After all, both of these professionals help their clients make better and more educated decisions when it comes to their financial lives. 

Even their process of education is similar. Financial advisors and consultants usually come from an economic background and hold many certifications related to the field. An MBA in personal finances is even better to make sure this is the right professional for you. 

There is one small difference that we’d like to point out. Most financial advisors hold a certified financial planner certificate (CFP), while consultants tend to hold a chartered financial consultant certificate (ChFC). Both of these certificates are highly valued and indicate that the professional is ready to help you make healthy financial decisions. 

Signs you need a financial consultant

If you got to this article the chances are high that you’re in dire need of a financial consultant. But did you notice the signs that this is necessary or just had a gut feeling about it? It’s time to make sure that hiring this type of consultant is ideal for you by checking if you tick some boxes. 

We brought the top 10 signs that you’re in need of a financial consult below. Are you ready to take the test? 

1. You can’t save up, despite earning a decent living

This is one of the most common signs that lead people to a financial consultant. Often you’ll notice that you don’t earn such bad wages, actually they are above average and more than enough to keep you and your family comfortable. But that doesn’t mean much, since you can’t save up or even come up short at the end of the month. 

Which means that, despite being able to provide for the present, you fail to plan for the future. So your retirement and even homeowning dreams are in jeopardy unless you manage to fix things right away. 

Once you get in touch with a financial advisor, they should help you set up a budget and start saving slowly. With time, this could even lead to some investments that will guarantee a future passive income. 

2. You don’t have retirement plans

It doesn’t matter how old you are, eventually age will catch up with you. While we’re young it seems like we have our whole lives ahead and don’t need to plan right now, but that’s a big mistake that many Americans make. The sooner you start planning out, the better. 

If you didn’t begin yet, that means you likely will have a difficult time to settle into a comfortable retirement. Actually, most families fall into that trap. Maybe young people won’t see this as a red flag, but as you approach your 40s or 50s you should start to worry. 

Planning for your retirement is a complex thing to do alone. Getting the help of a consultant is great to know where to invest to get good returns in the long term and manage your debt so it won’t get in the way of your future. 

3. You have no idea how to build and investment portfolio

Even if you try you won’t be able to work forever. That’s why investing is so important for everyone, no matter the age. But the odds are that you don’t really know where to start, aren’t we right? Well, that’s a huge red flag for your financial life and a sign that a financial consultant would do you good. 

Everything starts with understanding your risk profile before taking a leap of faith. It’s ideal to have a varied portfolio, so we don’t suggest you get every bit of savings you currently have to get into cryptocurrencies or ETFs. Instead, look to put a little bit into different types of investments according to how much risk you’re willing to take. 

A consultant will be able to help you choose a combination that leads to better short and long-term earnings. 

4. You have no long-term financial plans

Where do you want to be financially in the next 10 years? Does that sound like a hard question? Now imagine what that future will look like in 30 years, even harder. Even if that’s a normal situation, it isn’t ideal and could lead to some trouble down the line. 

For starters, it’s important to know how to set financial goals and actually reach them. This could be saving goals, investment goals or even setting up a retirement plan. It seems simple, but it’s actually next to impossible when you aren’t very experienced. 

That’s where a consultant could help you. This professional will help you set realistic goals for each part of your financial life so that you can commit to this plan. Even if you decide you’ll have $10.000 in your bank account by the end of the year, that isn’t realistic and will actually have the opposite effect on your finances. 

5. You are afraid of the stock market

The stock exchange market is one of the most profitable short-term investments you could get. Those who already have a bit of money saved up can easily get started and begin earning your desired passive income. 

Is that one of your dreams and you’d like to start? Then get a trustworth advisor or consultant. They won’t cure your fear of the stock market, but will get you started slowly and safely to guarantee better returns. 

If this advisor can help you create a better investment portfolio, then go for it! That’ll mean your money is safeguarded against market fluctuations. 

6. You earn a lot and pay a lot of taxes

Some high earners end up wasting a lot on taxes and forget to invest and prepare for the future. That’s a sign of poor planning, which could lead to a financial downfall over the next few years. You never know what’s lying behind the next corner, so a financial consultant should be your first call. 

High earners have better capacity for using saving and investment strategies since they can set aside a good deal of assets. That, in turn, can help them avoid some of their taxes and prepare for the future. Without a good consultant or advisor in their corner, this is all just a fantasy. So get one as fast as possible!

7. You keep putting off your financial plans

You wrote a list at the beginning of the year of a few things you wanted to do with your money. At the top is “save more”, then refinance your mortgage, get a loan to start your business and the list goes on and on. The sad thing is, nothing really happened. 

By the middle of the year you’re still putting off those savings and the rest isn’t even in your view. That’s a huge sign that something’s going on and only one specialist can help you understand what it is: the consultant. 

If you keep putting plans off because you came across unexpected circumstances, it’s time to take a step back and re-evaluate. Find out what’s wrong, fix it and start achieving your goals.