Insights & advice
When should you work with an advisor?
March 2023 – 15 min read
Key takeaways
When it's time to deal with milestones like getting married, buying a houseOpens in a new window or receiving an inheritance, many people turn to an advisor for help.
Advisors can also help with everyday things like finding the right insurance for you and your familyOpens in a new window, making a financial plan, and dealing with the unexpected.
When you choose to work with an advisorOpens in a new window will depend on your specific circumstances, but there are many points throughout your life when expert help can be useful.
When is the right time to speak to an advisor?
When it comes to making decisions with your money, sometimes research and reading will only get you so far. It may be that the time has come to get some professional advice.
An advisor can provide insight and personalized recommendations that can help you through life’s ups and downs. There can be many instances when it makes sense to get that extra bit of help, whether you are getting started, building your career, starting a family or getting ready to retire.
Life stages and milestones
Starting your career
There’s lots to learn when you start earning a regular income, such as how to pay down debtOpens in a new window, how to budget by paycheckOpens in a new window, how to understand paycheck deductionsOpens in a new window, and how to start saving and investingOpens in a new window.
It’s a good idea to get some advice on how to manage all of this when you start your careerOpens in a new window, as the sooner you start savingOpens in a new window, the more you can take advantage of compound interestOpens in a new window. This can help to grow your savings over time.
You may also want to consider the help of an advisor if there’s a change in your careerOpens in a new window. For example, if you take a new job with more pay, they can help you make the most of this extra income. If you change career paths completely, you may experience an interruption in earnings or a pay-cut, and advice can help you navigate this change in circumstance, too.
Starting to plan for retirement
One crucial thing to think about sooner than later is planning for retirementOpens in a new window.
Thinking about finishing your career when you’re starting it may feel counter-intuitive, and it’s easy to think there’s lots of time to sort it out. This could be especially true if you have other immediate financial needs such as paying off credit card debt or student loans. However, there are many benefits to saving for retirement early.
Working with an advisor can put you in a good position as you start earning a steady income.
Getting married
Getting married or entering a common-law partnership is an exciting time, but also one that requires lots of financial planning and thought.
Along with initial costs such as budgeting for a wedding or honeymoon, there are longer term things to think about such as how you’ll combine finances, set goals as a couple and allocate your money to achieve these.
Combining income can be a tricky subject and the right approach will vary between couples. You may feel most comfortable taking a “what’s mine is yours” approach and combining everything, or perhaps you’d prefer a split that uses a combination of personal and joint accounts. You may want to look a cohabitation agreement or prenuptial agreement (sometimes called a “prenup”), which can be useful if you plan on keeping your finances separate.
An advisor can help you navigate your changing financial situation when you get married or become common-law. They can ask questions and help you deal with potentially delicate subjects like managing a significant difference in income levels, pre-existing debt and financial obligations and current saving and spending habits.
They can act as an impartial third party, taking an objective view on the issues to suggest ways to compromise and move forward.
Making a big decision
There are several big purchases or life events that require substantial financial commitment.
You may choose to start a familyOpens in a new window, which will mean thinking about everything from budgeting for baby essentialsOpens in a new window to saving for post-secondary schoolOpens in a new window. Having a family also means thinking about how you’ll protect them in the event something happens to youOpens in a new window.
If you’re thinking about buying your first homeOpens in a new window, you may have questions about how to save for such a big purchase and how to use government programs or incentivesOpens in a new window to help.
Advisors can help you plan for these and other expenditures taking your specific circumstances into account. They can provide tailored advice on how to pay down debt, save more each month and make the most of tax-free savings accountsOpens in a new window and investments to help you achieve large financial goals.
Starting a business
Deciding to start a businessOpens in a new window is an exciting prospect, and an advisor can help you with the many financial decisions you’ll need to make in the process. They can help with:
- Advice around investing and borrowing money for your business
- Managing expenses and taxes
- Setting up a workplace plan to offer insurance to your employeesOpens in a new window
- Setting up a workplace pension planOpens in a new window that helps employees save for retirement
- Making sure you’re still working towards your own personal retirement goals
- Succession planningOpens in a new window
- Protecting your business with insuranceOpens in a new window
Divorce or separation
A divorce or separation is already a difficult time, but it can become especially complicated if your finances are combined. An advisor can help you protect your money and make recommendations on how to adjust your savings, investments and financial goals taking into account your revised annual income as well as any financial settlements you may receive.
Receiving an inheritance
If you’ve received an inheritanceOpens in a new window, you may be wondering how best to use this lump sum while managing legal and tax implications.
It’s around this time that advice can prove extremely helpful, as the urge to pay off certain debts or increase spending in the short-term might not be the best move in the long haul. You can get advice on how much to spend, how much to save and invest, how best to use it to pay-off debt and how to adjust your long-term financial plan taking all of this into account.
An advisor may also be able to help with any financial matters if you’re the executor of an estate.
Nearing retirement and/or retiring
An advisor can help you set up and alter your plans for retirement, as well as access your savings once you’ve retiredOpens in a new window.
Your dream for retirementOpens in a new window is unique to you, and so your retirement budgetOpens in a new window should be as well. Your advisor can ask questions that help you budget enough to enjoy the retirement you've always wanted. These might include:
- What does your ideal retirementOpens in a new window look like – do you want to slow down and relax, or use these years to travel and explore?
- What’s your target retirement age?
- How much have you saved for retirement?
- Have you contributed to a workplace savings planOpens in a new window?
- Where do you plan to live during retirement, in Canada or overseas?
- How do you plan to pay yourself in retirementOpens in a new window?
- Have you thought about whether you’d like to take your pension as a lump sum or purchase an annuityOpens in a new window?
An advisor will use this information to help create a plan that combines your personal savings with your workplace pension and government benefits to generate retirement income that suits your needs. They can also help to adapt this plan to match the cost of living, helping you through periods of inflationOpens in a new window when things might be more expensive, as well as times of recessionOpens in a new window when your investments may need some adjustment.
Help with everyday finances
Even if you’re not experiencing a particular milestone or event, there can be other times when it makes sense to seek expert advice.
New to managing money
It can be helpful to get advice if this is the first time managing your own finances. You may be:
New to Canada
Starting an entry-level job
Moving from earning an hourly rate to a salary
Recently separated from a partner who used to manage the finances
Someone who hasn’t had any experience analyzing finances or budgeting before
Easily overwhelmed or prone to procrastinating when it comes to managing money
An advisor can help you get started by assessing your financial history, your current situation and asking you about your goals for the future. They can provide advice on building good money habits, help simplify terms and names of products and can explain the basics of managing your money. All of this will help you build a financial plan that can be managed and adapted over time.
You need help dealing with debt or financial difficulty
You may encounter periods of financial instability throughout your life. This could be the case if you’re self-employedOpens in a new window and/or don’t have a steady income, you’re impacted by economic recessionOpens in a new window or if you experience job lossOpens in a new window.
An advisor can help prepare you ahead of these things happening and/or help you build back up your savings and manage debt after a period of financial trouble.
You’re strapped for time to plan your own finances
If you’re finding that you’re frequently neglecting managing your money, now could be a great time to reach out to an advisor for help.
Financial planning does require time and effort, and it’s here that expert advice can make a real difference. Advisors can not only help you put a plan in place now, but they can make recommendations around things like investment strategies that can help you generate wealth for the future.
They can monitor your investments and recommend changes to your portfolio to help you navigate things like market cyclesOpens in a new window and they can help adjust your financial plan as your life and goals evolve. They also keep up with things like changing tax laws and legislation that you may not be aware of or may not have the time to keep up with.
When you start earning more
Speaking of taxes - the more taxable income you earn, the more you’ll need to pay. If you’ve moved up a tax bracket, that could be a great time to enlist the help of a professional. Not only can an advisor help clarify tricky tax terminology and rules, but they can also help you find ways to make the most of tax-free allowances as well as claiming any government benefits that could help lower the amount of tax you owe.
What’s next?
Ultimately, the right time to choose an advisorOpens in a new window will depend on your specific circumstances – there’s no one-size-fits-all approach.
Make an appointment with an advisorOpens a new website in a new window to find out more about how they can help you when you need it most.
The information provided is based on current laws, regulations and other rules applicable to Canadian residents. It is accurate to the best of our knowledge as of the date of publication. Rules and their interpretation may change, affecting the accuracy of the information. The information provided is general in nature, and should not be relied upon as a substitute for advice in any specific situation. For specific situations, advice should be obtained from the appropriate legal, accounting, tax or other professional advisors.
