I don’t know what I don’t know and would like to better understand at what point in my life I should consider hiring a financial advisor or an accountant. Can I just hire one and not the other? Do I need both? And is the cost worth it?
No question, answer, or discussion of any kind facilitated on this site is confidential or constitutes financial or legal advice. Questions answered are selected based on general consumer interest, and not all are addressed. Questions and answers may be displayed online and archived by Wealthtender. To make Wealthtender free for readers, we earn money from advertisers, including financial professionals and firms that pay to be featured. This creates a conflict of interest when we favor their promotion over others. Wealthtender is not a client of these financial services providers. Learn more.
First, I want to say it’s a big step to recognize we don’t know what we don’t know around finances. The older I get, the more I feel the same way about many things in life and look for experts to guide my way 🙂
When I think about hiring a financial advisor or accountant, it’s really about looking for an expert to walk the path with you and to help empower you to make better financial decisions.
An accountant is traditionally a ‘transactional’ relationship where they prepare your tax return based on forms you submit and don’t provide a lot of additional insight. I do believe there are great accountants out there that now provide tax projections and recommendations on how to better your current tax situation. A small fraction, but a growing fraction. Generally, an accountant is great when you have rental properties or more complexities popping up and you need to better understand the tax ramifications of these decisions.
Financial advisors are traditionally investment managers. However, you will find a growing contingent of financial advisors who walk the full financial path with you. This is a thinking relationship where you can share your money thoughts, your concerns, your future hopes, and a place to learn together. Financial advisors can also help you craft strategies (including tax planning) to better your full financial outlook. They usually keep in mind that the tax tail shouldn’t be wagging the dog (your financial health) and can make sure that the decisions you make are right for where you want to go. A financial advisor can be great when you feel anxiety around money or want to feel more clarity in what your money can do for you.
Again, these are general differences and really come down to whether you can find that gem of an advisor that understands you and can communicate in a way that helps you feel more comfortable and secure with your money and how it will grow from here.
I wish you the best in your money journey!
I remember a mentor in my early days saying to me “CPA’s usually are filing based on past events and it’s too late”. Advisors and CPA’s working together is the key. They can project a tax forward scenario so you are aware of what your taxes are looking like. There are other factors such as are you a business owner? A 1099 employee? W-2? As you can tell, it can get complicated!
For all of our clients here at HD Money Inc, we require clients give us a copy of their tax returns so we can analyze them and see what changes can be made. Good luck to you!
www.hdmoneyinc.com
You’ve asked some great foundational questions.
Starting early is the best strategy regardless of your financial goals. A skilled financial advisor will not only educate and guide you but also motivate you to maximize your financial resources.
You asked if it is best to hire a financial advisor or an accountant. A financial advisor offers comprehensive investment guidance, taking into account both current and future tax implications. On the other hand, an accountant provides bookkeeping, and, depending on their qualification, they may prepare tax returns. Although they offer different services, they work together to ensure your success.
The cost of hiring a financial advisor or an accountant will vary from firm to firm. As a Certified Financial Planner™, it is important to me to provide transparency regarding my services and fees. You can find my fees listed on my website: imaginefinancialservices.com.