Can You Get By Without a Financial Planner?

Here’s what to ask yourself to find out whether you are prepared to go it alone.

(Image credit: portishead1)

You’ve probably wondered if you should work with a financial planner. As a financial planner myself, it’s not surprising that I gravitate toward an emphatic “Yes!” Below, however, I lead you through a few important considerations that can help you confidently make this decision for yourself.

Is Your Financial Life Simple or Complex?

I recently started working with a woman who worked for a company that had just been acquired. She said that up until now, her finances were pretty simple (I make a bunch of money — more than my parents did, to be sure, I save to my 401(k) and to my emergency fund, and I spend the rest), and she was comfortable doing it on her own. But this acquisition (and its implications for stock options, RSUs, new 401(k) plan, etc.) was a complexity too far.

For other clients, it isn’t a single event that tips them into seeking out a financial planner: It is just the accumulation of junk in their financial lives until they finally hit a wall. Recently, a woman sought me out for recommendations for planners local to her. She has an MBA and works in finance, but “whenever I apply that knowledge to my own money I feel very overwhelmed.” I think if an MBA working in finance can cop to that, then we should all feel a little better about our own feelings of being overwhelmed. Hell, even financial planners get overwhelmed by their own finances: because it’s not a simple matter of mathematics!

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

Ask yourself: Can you make all the parts of your finances work together? Or are you just playing whack-a-mole whenever a financial decision arises?

The Question of Cost

There is no rule of thumb that says “Paying over 2% of your income for financial planning is too costly” or “A financial plan should cost no more than $4,000.” It is all very specific to your situation.

But there are several ways to evaluate the cost of the planning you’re receiving or considering:

  • First and foremost, know what the cost is. In this profession, broadly speaking, we have a nasty habit of saying “Oh, pay no attention to the cost behind the curtain. Look over there! Shiny!” Costs aren’t on our websites. We charge percentages instead of dollar amounts. We hide the cost inside commissions.
  • Cost alone is meaningless. Value is what you want. What do you get in exchange for the money you pay? I could give you financial planning for $5 per month. But if I never did anything for you, that’s $5 straight down the tubes. (Plus, the regulators would want to have some stern words with me.) While there are some parts of financial planning that have a clear dollar value (“Look, Dear Client, I just saved you $1,000 in taxes by recommending you donate company stock instead of cash!”), there are even more that aren’t easily quantifiable. “Now I don’t wake up in a sweat at 4 a.m. wondering if I’ll ever be able to buy a home! Now I know I can take this vacation without feeling guilty!”
  • You can’t put a price on what you don’t know. It’s hard to know what the cost is of missing out on planning maneuvers you’re not even aware of. But you can know that the cost of not working with a planner is “continuing to be frustrated because I’m making no progress toward my goals” or “still unable to buy a home because we just can’t seem to save any money even though I swear we earn a lot!”

Ask yourself: What is the cost of not hiring a financial planner?

The Importance of Being Held Accountable

This is one of those “impossible to quantify” values of financial planning. It is also possibly the single most important value a financial planner provides. Have you ever set a financial goal (buy a home, save for retirement, pay off your debts) and then repeatedly not made any progress toward it? That’s what not having accountability looks like.

We all know, change is hard. And it really helps to have someone bringing your attention back to what you really want in order to make those painful short-term changes.

Ask yourself: You have a vision of your Good Life. Are you getting it done on your own?

Feel Confident in Your Choices

Some of my clients have pretty good investing and personal finance knowledge. Some come to me without much knowledge at all. But what they all want is to know is that they’re doing the right thing. The want to be sure that they’re not making boneheaded mistakes, missing opportunities or putting their finances or family at risk. They no longer want to feel like a lost little puppy when they enroll in employee benefits or when they leave a job and have to figure out what to do with their 401(k).

Ask yourself: If you currently manage your own finances, do you worry that it’s enough, or the right thing?

Financial planning is no longer the exalted domain of only the rich or the retired. As technology and service models continue to evolve, more and more people can find a financial planning relationship that works for them. Hopefully you’ve thought through the questions above. Here’s a final question: Is it time for you to start working with a financial planner?


This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Meg Bartelt, MSFP, CFP®
President, Flow Financial Planning, LLC

Meg Bartelt, CFP®, MSFP, is the president of Flow Financial Planning, LLC, a fee-only virtual firm that provides financial guidance to women in tech. She is a member of the XY Planning Network.