Do You Need a Financial Planner? The Pros, Cons and Costs

When planning for your dream retirement, if you’re like most people you have a lot of questions and maybe aren’t that confident that you are making the right choices for you. This is especially true for single women who have to be their own safety net. You might wonder if it makes sense for you to call in the professional help and work with a financial planner.

But not all financial planners are created equal. Let’s take a look at what different kinds of financial planners are out there, what each does well and where they might fall short, how much they cost and what to watch out for when deciding if professional support would benefit you.

What kinds of financial professionals help with retirement planning?

Knowing the different types of financial planners, what they are and how they differ, is a good starting point. If you decide to look into expert help, there are several kinds of finance pros that you might run into.

How they get paid: fee structures and what you’ll likely see

Knowing how financial pros charge is key when weighing your options. Broadly, compensation falls into three main categories: fee-only, fee-based and commission-based. Sometimes it’s a hybrid.

What it might cost you as a single woman

• A typical fee-only planner might charge approximately 1.0 – 1.2% per year of assets under management for investment management plus planning. For example, for $200,000 in invested assets, that could mean $2,000 – $2,400 annually.
• Flat-fee comprehensive financial plans can cost $1,000 – $5,000 once, depending on complexity. If you are planning for retirement, navigating stock options, multiple income sources or tax complexity, expect toward higher end.
• Hourly planners may charge $150 – $400+ per hour. Good option if you just need specific help now rather than ongoing management.
• Robo-advisors or digital advisors often charge much less: perhaps 0.25-0.50% of assets for investment management. But their advisory or planning offerings may be limited.

Pros of hiring a financial planner

Clarity and confidence
You get someone to help you map what you own, what you owe and what you can expect in retirement. That clarity means less anxiety.

Holistic planning
A good planner looks at more than just investments: taxes, insurance, estate considerations, health care and long-term care. When you don’t have a partner, you may need to make decisions solo. A planner can help you think through those.

Avoiding costly mistakes
Without expert help, you might pick investment products with high fees or commissions, overlook tax advantages or be underinsured. Those missteps add up over decades.

Accountability and momentum
It is easier to stick to savings goals, work through a budget and follow through on plans when someone is guiding, nudging and checking in.

Customizing for your situation
Your dreams might include retiring early, relocating, traveling, caring for aging parents or doing social good. A good financial planner can help tailor a plan that reflects your values, not just generic advice.

Drawbacks of using a planner

Cost
Depending on which option you go with and the value of your portfolio, fees can be significant. If your assets are modest or your financial situation simple, paying a high percentage may eat into your returns.

Minimums and access
Some advisors (wealth managers, high-end RIAs) require high minimums ($250,000 to $1 million) before they take you on or give you full services. That can exclude women who are earlier in their savings journey.

Potential conflicts
If an advisor takes commissions or works for a broker-dealer or insurance company, there may be incentives to recommend products that benefit the advisor more than you. Transparency is important there.

Varying quality and trust issues
Not all professionals are equal. Credentials, experience and fiduciary status matter. Bad advice can cost money and/or peace of mind.

Paying for things you don’t need
If your financial life is simple (one income, few investments, no business or no complicated taxes), you may end up paying for services that add little incremental value.

When going it alone makes sense (and when it doesn’t)

You may prefer managing your own retirement and investments. That is valid. But you also should be realistic about what skills, time and comfort with risk you have.

When it might work well:

• You enjoy learning about investing, tax rules and retirement systems
• Your finances are relatively simple (one or two income streams, minimal debt and not many investment accounts)
• You are disciplined about saving, reviewing your plan occasionally and adjusting when needed
• You don’t mind doing research and asking questions

When hiring help likely provides more value:

• You have complex financial situations (multiple investment accounts, business equity, real estate or variable income)
• You need help with estate planning or long-term care, or you want to leave a legacy
• Health or life expectancy issues or risks that you want professional help modeling out scenarios
• You lack confidence or knowledge, or you feel overwhelmed by financial decisions

What single women should watch out for

Because your path might differ from those who have dependents or shared finances, here are some specific considerations:

• Longevity risk: Women statistically live longer. Planning should assume a long retirement. That means higher savings, good investments, planning for inflation, health care and long term care.
• Lack of fallback or safety net: If you don’t have children, you may need stronger emergency savings, solid insurance (disability, long term care, life) and ensure your estate plan names trusted people and includes clear directions.
• Estate and beneficiaries: Make sure beneficiary designations are up to date. Set up a will and trust. Plan who will make decisions if you are unable to.
• Health and healthcare planning: Medicare, supplemental insurance, dental and long term care insurance may cost you more in your later years than you anticipate. A planner who understands those can help.
• Avoiding “one-size-fits-all” advice: Often, the financial tools, calculators or advice you see assume its for a couple or family. Make sure any planner you work with understands your particular lifestyle so the advice fits.

How to choose a financial planner if you decide to hire someone

Check credentials
Look for CFP certification or similar. Look for Registered Investment Adviser (RIA) firms. Ask if they are fiduciaries.

Understand fee structure fully
Ask explicitly how they get paid, what percentage of AUM (if applicable), if they take commissions or kickbacks or if they offer a flat fee or hourly option.

Ask about minimums
Check if they require a minimum value for your portfolio as well as whether there is a retainer or subscription fee.

Discuss what services are included
Is the planner just managing investments or full planning (taxes, estate, risk, retirement income)? How often will you meet or communicate?

Get referrals or reviews
Ask other single women in similar stages of retirement planning who they use and why.

Start small or try project basis
Maybe get a one-time financial plan rather than long-term asset management if you are unsure. See if the advisor adds value before fully committing.

Whether or not a financial planner makes sense for you is an individual decision that only you can make. You don’t necessarily need one to retire well. If you are comfortable doing the work and your finances are simple you might be more than ok to manage on your own. But, in many cases that professional help can make your road to retirement easier and safer. Do you homework, ask for referrals, meet with a few planners to check them out and see what feels right for you.