July 25, 2019

People With a Financial Adviser Say They Aren’t Just Better With Money — They’re Happier With Life Overall

People with a financial adviser say they aren't just better with money — they're happier with life overall

There’s no right or wrong approach to managing money, but many people find that it pays to hire help.

For the latest installment of its Planning and Progress Study, Northwestern Mutual surveyed 2,000 American adults and found that financial stability plays an outsized role in a person’s overall life satisfaction.

According to the survey results, 92% of people say nothing makes them happier or more confident in life than having their financial house in order. While only about one-third of the survey respondents said they have worked with a financial adviser, those who do report much greater financial stability.

Sixty-six percent of the survey respondents who have a financial adviser said they feel financially secure, compared to 30% of those who don’t pay for professional help. A whopping 85% of respondents who work with a financial adviser feel their personal life is headed in the right direction, compared to 71% of those who don’t have an adviser. And seven in 10 respondents who have an adviser said they’re happy with their life, compared to five in 10 people who said the same but handle their money on their own.

Further, people who work with a financial adviser are more likely to know how to balance spending now and saving for later; set specific goals and feel confident that they will achieve those goals; and have a plan in place to weather economic ups and downs, according to the survey.

What does a financial adviser do?

Financial adviser is a catch-all term that usually includes financial planners and investment advisers. A good certified financial planner can help organize your overall financial picture, including setting up a retirement saving and investing strategy; planning for big expenses, like buying a house or having kids; everyday budgeting and spending; plus tax and estate planning.

You may also consider hiring a financial planner if you’re too overwhelmed or confused by your money to make big financial decisions, including how to balance multiple financial goals, manage a business, get out of crushing debt, or establish a retirement savings plan. If the alternative to meeting with a financial planner is decision paralysis, you’re better off seeking outside advice.

Investment advisers typically focus on the nuances of your investment strategy, such as what stocks or funds to buy in and out of your retirement accounts and how to minimize taxes. They can also manage your investments, but usually charge a fee of 0.5% to 2% of the portfolio. You don’t have to be a sophisticated investor with millions in the market to have an investment adviser, but you probably don’t need one if you just want to know how to invest a few thousand dollars or which funds to choose in your retirement accounts.

Keep in mind that it’s best to look for financial advisers who follow the fiduciary rule, meaning they operate in their clients’ best interest, and are fee-only. This means client fees are their only compensation and they don’t earn commission when you invest in certain funds or buy financial products.

To read the original article, please visit Business Insider.