8 Financial Turning Points That Call for Professional Advice

With digital planning tools, online resources, and AI becoming increasingly accessible, many people feel more empowered than ever to DIY their financial planning.  

Those tools can provide useful information and help answer specific questions. As financial lives become more complex, however, many people find that the challenge is less about finding information and more about understanding how different financial decisions fit together. 

A wealth manager can do more than help oversee an investment portfolio. If you’re beginning to notice complexity creeping into areas of your financial plan, it’s natural to begin looking for help evaluating how taxes, investments, retirement planning, estate planning, and other decisions fit together. 

When it comes to the timing of hiring a wealth manager, it is different for everyone. Some people are comfortable managing their financial lives independently for many years, while others reach a point where increasingly interconnected decisions create a need for additional guidance and coordination. 

So, suppose you're asking yourself, “When do I need to hire a financial advisor?”  

The answer will be personal and nuanced, but we’ve put together a list of 8 life milestones or ‘turning points’ where already having an advisor on your site can provide a lot of value.

This goes beyond the research that shows working with an advisor can provide greater investment returns and focuses on situations where additional planning, coordination, and guidance may become increasingly valuable.

Retirement

This one isn’t a surprise, but it’s worth mentioning in a way that may surprise you. Most people invest throughout their careers with the goal of eventually replacing a paycheck with income generated from their assets.

A wealth manager’s help prepares you for retirement by considering all scenarios that could come along. The problem we most commonly see is that people wait until they're too close to retirement to start working with the right advisor. Waiting until you're a year or so from wanting to retire before connecting with an advisor gives you less runway to create an optimal retirement position.

The earlier you can have a detailed conversation about your social security strategy, whether Roth conversions are a tax-smart strategy for you, required minimum distribution (RMD) planning, or simply retirement spending plans, the more peace of mind you can have heading into retirement.

Equity Compensation, Employee Stock & Stock Concentration

Equity compensation has become increasingly popular, especially in start-up companies. Understanding how stock options work, when they can be exercised, and how those decisions may affect taxes, cash flow, and long-term financial goals can become increasingly important as the value of those awards grows.

Exercising stock options is often more than an investment decision. Questions involving taxation, concentration risk, future vesting opportunities, and overall financial objectives may all factor into the evaluation. As a result, many individuals find it helpful to consider those decisions within the context of a broader financial plan.

Here are factors that require crucial attention in a timely manner:

• You may not fully understand your equity offering, making it difficult to evaluate how those benefits fit into your broader financial plan. 

• Decisions involving equity compensation can create meaningful tax implications that affect cash flow, investment strategy, and future planning decisions.
• As shares accumulate over time, a growing concentration in company stock can create diversification and risk-management considerations.
• Many employees struggle with the complexity of stock purchase plans, vesting schedules, and selling decisions, making it difficult to determine how and when to sell shares in a tax-efficient manner.

Equity is a powerful tool that can accelerate your plan, but it doesn’t come without risk. We’ve put together a full equity compensation toolkit with resources curated by Certified Financial Planners (CFP) on our team who help executives navigate large equity decisions every day.  

Divorce

Divorce often affects more than personal relationships alone. Assets, liabilities, retirement accounts, insurance coverage, estate documents, tax planning, and long-term financial goals may all need to be revisited as part of the transition.

Many individuals find themselves making important financial decisions before, during, and after the divorce process. In some cases, one spouse may have previously handled most financial matters. In others, both individuals may need to evaluate how newly separate finances affect their long-term plans.

Depending on the circumstances, it will likely be helpful to review estate plans, beneficiary designations, insurance coverage, retirement strategies, investment allocations, and cash flow assumptions.

Financial complexity can increase as assets grow, which is why we also created a guide focused specifically on high-net-worth divorces.

Death of a Spouse

Your financial health can add unneeded stress at such a difficult time, but things change substantially when a spouse passes. Like a divorce, your advisor takes care of many changes, including managing your estate, tax planning, investment planning, changing beneficiaries, and recalculating income and expenses.

Depending on the circumstances, those decisions may include evaluating options for inherited IRAs, understanding required minimum distribution (RMD) rules, reviewing beneficiary designations, and assessing potential Social Security survivor benefits. During these transitions, many individuals find it helpful to have a structured process for evaluating how those decisions affect their broader financial picture.

During such a period, having help, both to handle the logistics of the financial piece and to be there as an emotional support as you change your life and goals.

Growing or Exiting a Business

Your financial situation substantially changes whether you’re exiting a partnership or selling your sole proprietorship. For most business owners, the focus of their bandwidth to manage finances is focused on the business, not their personal finances. Income changes, an infusion of cash, tax strategies, and estate makeup are transformed, requiring updates to your financial and estate planning.

Before and after such a considerable change, your wealth advisor makes adjustments to fit your customized plan to the updated financial considerations. You can deal with exiting the business profitably and let your advisor handle everything else.

Tax Time

This is another one that probably sounds like a no-brainer. Of course you’d want professional advice on your taxes, but the important thing is recognizing when your needs have gone past the basics. Many think about taxes as an annual task with the only goal being “how can I pay less this year?”

Through 40+ years of experience working with high-net-worth families, we've found it's is often worth taking a step back and considering your lifetime tax liability rather than looking at just this year in isolation. It's not worth minimizing tax impact this year at the expense of working towards your retirement goals. Working with experienced CPAs and Wealth Managers can help you feel assured that you're making the best tax decisions both for this year and for years to come.

The complexity of your tax situation is also a sign that you should be working with an experienced advisor. If you have property or income in multiple states, or if you have personal, trust, business, or other tax liabilities, the coordination of those liabilities is crucial to building a short-term and a long-term strategy.

Explore whether the complexity of your tax situation warrants attention here.

Considering Generational Wealth

As wealth grows, many financial decision begin extending beyond your own lifetime. You begin focusing on your legacy. Questions involving generational wealth, wealth transfer strategies, family financial education, and preparing heirs to manage assets responsibly often become more important over time.

With a considerable and complex estate, passing assets and money to your children takes some planning. The estate might include businesses, real estate holdings, investments, and other assets. Even with higher exemption thresholds for estates, there’s a lot of complexity that can go missed and result in leaving less behind for your loved ones or charitable causes.

Your advisor is there to assist with crafting an estate plan, ensure proper insurance is in place, and help adapt your generational wealth plan as situations change.

Excess & Charitable Giving

Once you’re confident you have built a nest egg large enough to meet your personal and financial goals, your mindset may shift toward what else you can do with your wealth. Understanding that you have excess and want to handle it strategically is important.

One thing we’ve found in our 40+ years of working with high-net-worth clients with clients in this position is how charitable giving can become a much bigger part of your financial plan and your legacy. It may start with a simple conversation about whether a Donor Advised Fund is right for you. It may open up more doors to discuss what type of change you’d really like to foster in the world.

For example, we worked with Betsy Cohen, a philanthropic futurist to discuss the research her team at Future Good has put together on purposeful giving.

Why Work with an Advisor

It's easy to associate financial advice primarily with investment management. As financial lives become more complex, however, many of the most important decisions often involve taxes, retirement planning, equity compensation, wealth transfer, and other areas that influence one another.

Whether you’re considering new equity options, finally digging in on how to maximize their potential, reeling from a surprise tax bill, or simply ready to see what taking personal finances off your plate could

Curious if you’ve outgrown basic financial advice? We should chat.

Disclaimer: Plancorp does not provide legal or tax advice. Clients should consult their attorney, CPA, or other qualified professionals regarding their individual circumstances.