Why Individuals Use a Financial Professional

Individuals with a financial advisor hired one as a result of a specific life event, such as death in the family and/or receiving an inheritance and because of marriage or divorce.

To view the full article please register below:

    First Name (required)

    Last Name (required)

    Your Email (required)

    Why Individuals Use a Financial Professional

    Why Individuals Use a Financial Professional

    In a recent survey by MagnifyMoney, a news content site owned by Lending Tree, 60% of individuals with a financial advisor hired one as a result of a specific life event. The most common reasons for hiring a financial professional were “death in the family and/or receiving an inheritance” and because of “marriage or divorce.”1

    Other common reasons for hiring a financial professional included “achieving financial goals,” “getting general financial advice” and “creating a comprehensive financial plan.”2

    Surprisingly, though, only 30% of the surveyed respondents have a paid financial professional. Forty-five percent were without an advisor due to the misimpression that they cost too much, while 42% believe financial professionals are only for the wealthy.3

    The list of reasons for working with a financial professional, of course, runs far longer.  Among them may be:

    • Coming into receipt of a lump sum of cash. This event is not limited to an inheritance; it can be as a result of a bonus, buyout or even a big raise.
    • Having children and planning for funding their college education.
    • A looming retirement. The development and management of a sustainable retirement income strategy is far more difficult than simply investing money during the accumulation phase. It may require the piecing together of a symphony of products and strategies to deliver the right combination of reliable income streams and inflation-adjusted capital growth.
    • When aging parents need long-term care or planning for personal future long-term care expenses.
    • Wealth transfer planning, which requires understanding the methods and timing of transferring assets to heirs or creating a charitable legacy.

    Now, the Best (Overlooked) Reason to Hire a Financial Professional

    Most of the reasons for hiring a financial professional revolve around obtaining expert help to take some action (e.g., building a diversified portfolio or setting up a child’s college funding plan).

    However, one of the most important reasons to work with a financial professional is the least recognized one—it is the role a financial professional can play in preventing individuals from making bad decisions that can have short- and long-term consequences to their financial health. In the role of behavior modifier, the investment professional can add tangible value that never officially reflects in any investment performance number, but may contribute to long-term success in meaningful, if immeasurable, ways.

    While each individual or family will have its own considerations for the future, a financial professional could be one worth adding to the list; the value an educated and experienced professional could bring to the planning process may prove immensely beneficial.


    1. https://www.magnifymoney.com/news/financial-advisors-cost-survey/
    2. https://www.magnifymoney.com/news/financial-advisors-cost-survey/
    3. https://www.magnifymoney.com/news/financial-advisors-cost-survey/

    Please reference disclosures at: https://blog.americanportfolios.com/disclosures/




      Subscribe to receive a monthly recap of our three most popular posts.

      Recent Videos


      AP Awards 2021