It is easy to neglect financial planning when dealing with the many distractions in life. For some, it is a crucial ongoing task that requires attention and possibly the expertise of a professional financial planner.

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Whether or not a financial planner is necessary is becoming more of an issue for Americans who begin noticing the increasing complexity of their finances.

Financial planners serve clients by educating and offering advice in various financial aspects that often include retirement planning, estate planning, cash flow management, and tax planning – tailored to best help clients reach their life goals. Their fees may consist of an hourly rate, a flat fee, or a fee based on a percentage of their clients’ assets.

But, when, if ever, is hiring a financial planner considered an appropriate decision?

The Life Cycle

In a study, based on combined data from 1998 to 2007, by economist Sherman Hanna of Ohio State University, the 17.6% of participants under the age of 30 used a financial planner.

Most people in their early stages of adulthood are typically just beginning to build stable sources of income. They tend to have few financial accounts and minimal assets while their lifestyle remains rather spontaneous.

Most likely, their finances haven’t yet reached levels of sophistication and stability that will warrant investing in a financial planner.

The study found that an average 24.3% of those ages 30 to 69 used a financial planner.

With age comes major life decisions that include plans to purchase a home, have children, save for college costs, establish a retirement nest egg, and much more. Finding the right financial planner is essential when your money is being stretched over many different avenues.

One possibly alarming piece of information that the study discovered was that only 15.7% of respondents who are 70 and over used a financial planner.

During retirement and the later stages of life, the older generation has to manage their spending so they don’t outlive their savings. Furthermore, it would be wise for them to consult financial planners to plan their estate in the event of their passing.

Other Calls for a Financial Planner

Besides age, there are plenty of other factors that would justify a financial planner.

Financial planners are often considered for those who are struggling with large amounts of debt. Influential life decisions such as a career change, a divorce, or going back to school would also be worth a comprehensive professional review.

Anyone with a sizable income and net worth – especially when a 1% shift can make a significant difference – can utilize a financial planner to manage their money regardless of their age.

Or, simply having a foreign pair of eyes on one’s money can provide a valuable second opinion.

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  • Sunk818

    I only work with Flat fee financial planners. Anything else is a conflict of interest. There’s an article about index investing when google just had their iPo. The asset planner set up the client, Charges a percentage for one year, then fires himself. Everyone else can automate. Educate yourself and you can plan yourself. It’s all online now for free.