Younger Investors: When is the Right Time to Hire a Financial Advisor?

Market Performance Summary

Today there is an app for everything. Including for managing money, assets, and liabilities. According to a recent report published by The Zebra, eighty-five percent of young adults use at least one personal finance tool or app, with more than half foregoing the assistance of a human advisor. Fifty-four percent of 26-year-olds manage most or all their finances without help. Apps, mostly, can be highly effective, especially for simple daily financial tasks. But how do young investors know when they may need more than some clicks or a chat bot, and be ready for the next step of an actual conversation with a (human) financial professional?

Typically, this is predicated by some sort of significant life event and/or a need for information and guidance beyond the maze of google searches. And although the internet offers a plethora of information and advice, it is often difficult to decipher and separate the gold from the garbage. When it comes to financial guidance, the nuances and complexities of real life often warrant a more in-depth conversation with an experienced professional. But the right time to find a trusted professional is not when a financial emergency arises, and the clock is ticking. Having a rapport and an established relationship with a financial advisor you know and who knows you, can help provide a steady voice and measured hand when needed. That is why young investors should start planning and building a relationship with a financial services professional now. It takes time to identify and interview potential candidates to ensure there are synergies and a good fit. Working with a human advisor rather than solely relying on an app offers several benefits:

  1. Personalized Advice: Financial professionals can offer personalized advice tailored to an individual’s specific financial situation, goals, and risk tolerance. This level of customization is often not available through financial apps, many of which offer only limited functionality or access to a limited menu of proprietary investments.
  2. Flexible cost structure: Believe it or not, a human advisor might not cost more than a computer subscription service. Many established advisors provide services to next-generation investors by including them in family relationships at a reduced cost. And more financial advice platforms targeted to young investors are offering access to a human advisor in addition to app-based services.
  3. Complex Financial Situations: For young investors facing complex financial situations such as purchasing a home or business, starting a family, or negotiating a bonus at a new job, a financial professional can provide expertise and guidance that goes far beyond what an app can offer.
  4. Holistic Financial Planning: Financial professionals can help younger adults develop a comprehensive financial plan that considers various aspects of their financial life, including budgeting, saving, investing, insurance, and retirement planning, with a view toward financial wellness. Apps may focus on specific aspects but fail when it comes to understanding the big picture.
  5. Behavioral Coaching: Financial professionals can offer behavioral coaching to help younger adults make informed financial decisions, stay disciplined, and avoid common pitfalls such as impulsive spending, emotional investing or falling for the latest meme stock. Apps may lack the human touch needed for effective coaching.
  6. Accountability and Monitoring: Periodic meetings with a financial professional can provide accountability and ongoing monitoring of financial progress. This can help younger adults stay on track with their financial goals and adjust as needed.
  7. Access to Resources and Networks: Financial professionals often have access to a wide range of resources, tools, and networks that can benefit younger adults in their financial journey, such as market research, investment opportunities, or specialized financial products. There is nothing more valuable than getting off on the right foot, and avoiding financial pitfalls that can sabotage a budding career.
  8. Life Transitions Support: As young adults navigate life transitions like changing careers, getting married, starting a new business, or planning for retirement, a financial professional can provide guidance and support to adapt their financial plan accordingly.

While financial apps can be convenient and useful for certain aspects of fiscal management, establishing a relationship with a financial professional can help young adults build a strong financial foundation and start cultivating decades of portfolio growth.

Christina Worley

Christina Worley, CPA/PFS, CFA, CFP®

Christina Worley is the Founder and Managing Member of Castle Wealth Management. Under Mrs. Worley’s guidance since 1997, Castle Wealth Management has grown to become an established, fee-only fiduciary provider of wealth management services with more than $400 million of assets under management.

Subscribe to Our Blog

Sign up to receive an email notification when we post a new blog.

Recent Posts

Book An Appointment