5 times You Need A Financial Planner — even if you're good with money

When it comes to managing your money, you might want a financial planner on the job. It is the same as there are situations when you should call in a professional — like when you're rewiring a bathroom or renovating your home.

What does a financial planner do?

A financial planner looks at the big picture when it comes to your money and develops a comprehensive plan to address your needs and long-term goals. Ideally, he or she can advise you on investments, insurance, estate planning, and taxes, among other things.

Your planner might be paid hourly, on a project basis, via a monthly retainer or most commonly through a commission percentage of any services he or she manages on your behalf.

Do you need a financial planner?

If your finances are relatively simple and your money questions can be answered with a Google search, you do not need a financial advisor. You don't need someone to tell you that you need to enhance your EPF’s withdrawal for investment.

"Do you need a surgeon to put on a plaster? Do you need a mechanic to put air in your tires? The complexity of the situation should dictate how much help you need." - Pedro Silva, a financial advisor in Massachusetts.

Moreover, there will be choices to review, decisions to make and forms to fill up. Below are four potentially complex money situations that might warrant a financial planner.

You Are Getting Married
Sometimes combining finances requires a neutral party. A financial planner can be that party, says Scott Snider, a financial planner who works in Ohio and Florida.

"When couples are first married, they're still getting to know how they both operate in terms of money. A financial planner can help them work through defining their goals, how they look at their money, and then ranking and prioritizing goals." - Scott Snider

Once you have a plan, you can implement it yourself and check in with a planner as you approach other milestones that could affect your finances, such as having children.
A planner can also determine whether you and your partner are better off filing taxes together or separately. Depending on scenario, filing separately tax return may save thousands of ringgit.

You Are Getting Divorced
Happily ever after doesn’t always end that way, and the consequences can wreak havoc on your finances. For starters, you’re likely going from two incomes to one. You’re also divvying up financial assets — property, investments and cash — and responsibilities, such as child support and alimony.

“Anyone going through a divorce should find a good lawyer and a good planner and make sure they’re on the same page. A good lawyer will fight for a fair division of assets and a financial planner will help you hit the reset button and figure out how to manage your money going forward." - Scott Snider

You will still need to update your financial documents like your EPF beneficiary, Insurance nominee, housing loans (if it is a joint loan), will and or your living trust.

You Are Starting A Family
Babies are expensive. That’s not news to parents, but exactly how expensive might be surprising.
With health care, clothing, food, toys, diapers and day care, parents could spend more than RM50,000 in just their child’s first year. Never underestimate the costs of raising a baby.
A financial planner can help you plan for your child’s first year and beyond. He or she can advise you on balancing college savings with retirement savings and other priorities, ensure you have the right level of disability and life insurance coverage, and help you stretch your dollars.

Your Salary Increased, Big Time
You didn't just get a new job, you got your dream job. But this gig could raise new financial questions, such as how to handle stock options or lessen your tax burden. A financial planner can help you answer those questions, as well as others you didn't consider.

"I help develop and implement tax-savings and execution strategies to ensure they make smart financial decisions on how they handle their income, benefits and investments," - Paul Murray, a financial planner in Pennsylvania.

When You Have No Plans
Lastly, if you are just living paycheck by paycheck, month by month, it is time you seek for a financial planner's advice. A proper financial planner will assist you in leading you on how to save from your overspending and recommend some solutions for you. A proper financial planner will be able to highlight to you your retirement goal planning as well.

 This article is adapted from NerdWallet for Malaysian context.

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