Merrill Lynch recently asked its director of enterprise financial planning, Karen Burns, what were the top reasons people turn to a financial advisor. She suggested five major life events that often prompt people to seek advice.
Merrill had already heard an answer to its question from some 20,000 people who responded to a Twitter poll in 2017. These were the top reasons they said they would most likely turn to a financial advisor for help:
- Buying or selling a home ‒ 36%
- Thinking about retiring ‒ 36%
- Becoming a parent ‒ 15%
- Divorce and remarriage ‒ 13%
“Major life changes like these often make people realize how much they don’t know about the markets and their financial lives — and what’s at stake,” Burns said in a statement. “But it’s not always a good idea to wait until you need expert advice to seek it out.”
Burns said it can be helpful to speak with someone who can help you look beyond your immediate needs to help you build a strong financial future. “When you work with an advisor, you’ll always have someone you can turn to for advice as your life changes and you need to take a fresh look at your finances.”
Following are Burns’ top five reasons why people engage with an advisor, along with some basic questions advisors should be prepared to answer.
1. Starting a family
Question: When should we start saving for college?
The average cost of raising a child for the first 17 years comes to $233,610, not including college tuition or inflation, according to government figures cited by Merrill.
An advisor can address issues such as when to start saving for a child’s college education and how to keep one’s retirement savings on track while providing for a growing family.
2. Buying or selling a home
Question: How much debt can I take on?
Major financial transactions often involve financial retrenchment or important decisions about how best to deploy one’s financial resources. Before house hunting begins, an advisor can offer help to figure out how much debt the buyer can take on, how much money to deploy as a down payment and his or her ability to keep other important financial goals on track.