Should I Get a Financial Advisor In My 20s and 30s?

At what point in your life do you think it’s appropriate to start seeking out financial advice? For some, it may be when they start their first job and begin to receive a regular paycheck. 

For others, it may be when they get married or get their first child. And for some, it may not be until they are facing retirement and need to start thinking about how to make their money last. 

There is no right or wrong answer.

But if you are in your 20s or 30s, you may want to start considering whether or not you need a financial advisor. 

” Mapema ndo best.” This is because you are likely to be in a period of significant change in your life, which can have an impact on your finances. 

For example, you may be finishing school and starting your first job, or getting married and starting a family. These are all major life events that can impact your finances.

Read Also: 6 Financial Steps to Take When Making a Big Life Change

A financial advisor can help you navigate these changes ensuring you’re on track to meet your financial goals. They can also help you understand and make the most of the opportunities available to you.

So, who is a financial advisor? What are the benefits of working with them? How much do they cost? 

Don’t worry. This article answers all these questions and more in detail. 

Let’s jump in.

Who is a Financial Advisor?

Financial advisors or consultants are paid to provide guidance and advice on financial matters to individuals, businesses, and organisations. 

Like other professionals, they must adhere to a strict code of ethics and maintain professionalism and integrity. So, what exactly do they do?

Read Also: Why You Might Need a Financial Advisor

What do Financial Advisors do?

Financial advisors guide clients on how to manage their money. They will sit with you to discuss everything from budgeting and saving for specific goals such as big purchase items, to investing and retirement planning.

They also help clients stay informed about changes in the marketplace that could impact their financial picture. 

Many focus on the following areas as well:

• Insurance reviews and advice
• Debt management
• Tax saving strategies
• Health care planning
• Banking solutions

In a nutshell, financial advisors provide you with the tools and knowledge you need to make sound financial decisions.

Read Also: 9 Ways to Prepare for Retirement in Your 20s.

Types of Financial Advisors in Kenya

There are different types of financial advisors in Kenya, each with their specialties and areas of expertise. Most work for banks, insurance companies, or other financial institutions,  while others work directly with clients.

Some of the most common types of financial advisors you’ll meet include; 

• Investment advisors: They focus on helping their clients make better investment decisions.
• Financial planners: They help clients to plan for their future financial needs and goals. 
• Tax advisors: They can help you minimize their tax liability and maximize their tax refunds.

Read Also: Strategic Financial Planning: A Guide to Planning Your Future.

Benefits of Working with a Financial Advisor

Working with a financial advisor can help you get your finances on track.  Here are five reasons to work with a financial advisor, especially in your 20s and 30s.

1. To get a headstart on retirement

Working with a financial advisor is one of the best things you can do to ensure a comfortable retirement. A financial advisor can help you determine how much money you will need to save to retire comfortably.

Besides, financial advisors can help you create a retirement plan tailored to your unique circumstances, including your income, debts, and any other assets you may have. This personalized approach ensures you make the most of your retirement savings.

Additionally, they can help you monitor your retirement savings and make adjustments as needed to ensure that you are on track to meet your goals.

Read Also: How to Plan for Retirement While in Your 30s

2. To start saving

If you need help figuring out how to start saving, working with a financial advisor can be a great way to get started. For instance, they can guide you on how to create a budget and help you achieve your financial goals.

They can also offer advice on how to best save, whether that means opening a savings account, investing in a specific type of account, or even just helping you stay disciplined with your spending. 

Read Also: Stability: How to Budget and Save A Lot Early In Your Career

3. To create a comprehensive long-term financial plan customised for you

Financial advisors can help you create a long-term financial plan tailored specifically to you and your unique circumstances. They ensure you’re on the right track.

A good financial advisor will consider your current financial situation, your goals, and any other relevant factors to create a plan that suits you. As such, you can avoid making costly mistakes.

They will then work with you to implement that plan and help you stay on track.

Read Also: 10 Long-term Financial Goals to Start Today

4. For peace of mind    

Another benefit of working with financial advisors is that they can provide emotional guardrails. 

We all have our ups and downs and sometimes it can be tough to stay on track. 

A good financial advisor will help you stay focused and motivated, even when things are tough. 

They can provide an objective perspective when you need it, and help you to make decisions that are in your best interests.

As such, a financial advisor can be a great emotional support system, helping you to stay on track and reach your financial goals.

Read Also: Top 5 Ideas for Reducing Money Stress and Reaching Your Financial Goals Faster

5. To nurture healthy financial habits

If you're not used to handling your finances responsibly, developing good habits on your own can be an uphill task. However, a financial advisor can help you get on track by providing guidance and support. 

They can teach you how to create a budget, set financial goals, track your progress, manage your debt, and more!

In sum, they can make a big difference in helping you stick to your plan and improve your financial habits.

Read Also: Good Financial Habits to Start With Your First Job

When to Get a Financial Advisor

There are a few times in your life when it may be a good idea to consult with a financial advisor. For example, if you are considering buying land, a financial planner can advise you on financing options. 

Another great time to speak with a financial advisor is when planning for retirement. They can help you figure out how much you need to save and what kind of investments will give you the best return.

Lastly, if you're feeling overwhelmed by your financial situation, working with a financial advisor can benefit you. They can help you create a budget, break the debt cycle, and save for the future. 

No matter your financial goals, a financial advisor can help you make a plan to achieve them.

Read Also: Why You May Need a Financial Advisor

How to Choose a Financial Advisor

Here’s what to keep in mind when choosing a financial advisor.   First, you need to assess your financial needs and goals. This way,  you can narrow your search to advisors who specialize in the areas that interest you.

Next, ensure the advisor is licensed and registered with the Institute of Certified Investment and Financial Analysts (ICIFA). 

ICIFA is the body mandated by law to regulate investment and financial analysis professions in Kenya. It ensures that the advisor maintains a high standard of conduct.

Also, check out the advisor's credentials and track record.  You don’t want to end up in the hands of a quack. 

Be sure to ask about their experience working with clients like you.  You can also ask for references or check online reviews to know them better.

Finally, you'll need to interview a few advisors to find the right fit.  Ask them questions to get a feel for their communication style and approach to financial planning. 

Ultimately, you want to choose an advisor you're comfortable with and who you feel confident will help you meet your financial goals.

Read Also: 5 Reasons Why Long-Term Goals Are Important 

How Much Does a Financial Advisor Cost?

There is no one-size-fits-all answer to this question. The cost of hiring financial advisors in Kenya will vary depending on a number of factors, including the advisor's experience, qualifications, and the type of services they provide.

However, as a general guide, you can expect to pay between 1-2% of your investable assets per year for comprehensive financial planning services.

Wrapping Up

Here’s the bottom line: It can be overwhelming to manage your finances, especially in your 20s and 30s. You’re inexperienced and may not have a solid plan. As such, a financial advisor can benefit you immensely.

The right one can help you reach your financial goals, streamline your decision-making, and guide you to the future you want.