Do You Need a Financial Advisor Before the End of the Year? Here's How to Know for Sure Have you reflected on what went well and what didn't go so well with your finances this year? Do you need to get a financial advisor's help before 2021 winds...

Suspect that you might need a financial advisor or financial planner? Deciding whether to add a financial advisor to your "team" might depend on a variety of reasons, both personal and practical. The end of the year might be the right time to search for your newest team member.

In a CNBC and Acorns Invest In You Savings Survey, the majority of Americans polled reported that they manage their own finances, with no help from a professional or online service. The survey showed that 75% of Americans manage their own money — only 17% manage their money with a financial advisor's help. In terms of age groups, a total of 31% of Americans aged 65 and older use a financial advisor, compared to just 4% of Americans between the ages of 18 and 24 and only 7% of Americans between 25 and 34.

Let's walk through what financial advisors do, the reasons to get a financial advisor's help before the end of the year and what type of financial advisor might make sense for you.

What Can a Financial Advisor Do to Help at Year End?

Working with a financial advisor at the end of the year can be a good time to assess what worked and what didn't this year. Were you often short of money to pay bills each month? Do you have increasing debt pressure? Did you identify specific goals over the past year to ensure your family's future stability?

A financial advisor can help you quantify those goals. For example, let's say you had a baby this year and want to start saving for college. A financial advisor can help you calculate how much you need to save per month to reach your college savings goals.

Whatever major life decision you have on the horizon, a financial advisor can help you put a plan in place. Your financial advisor will look at a number of factors, from your salary to your time horizon, to help you make smart money choices.

Reasons to Get a Financial Advisor Before the End of the Year

Your finances can become increasingly complicated from year to year. You may want to consider getting a jump on the next year for the following reasons.

Reason 1: You're new to making financial decisions.

Do you understand the basics of investing? Working with an advisor can lay the groundwork to set you up for future success. You may only need to hire someone temporarily, while you get used to making decisions about your future. You might not need a financial advisor forever — you just might want one to get you going in the right direction.

Reason 2: You experienced a major life event.

This year, did you get married, have a child, get divorced or experience the death of a spouse? Each of these life transitions require careful financial planning. You may need more than just basic financial advice; you may need someone to help you decide on your best course of financial action. For example, your spouse may have died and left you a lot of money through a life insurance policy. A financial advisor can help you determine a balanced asset allocation in various investments so you can take care of all of your needs, whether you save for retirement, plan for college, budget for short-term needs and more.

Reason 3: You receive or plan to give a large sum of money.

During the holidays, families often give generously to their loved ones. You might receive an unexpected large sum of money, which might deserve a financial advisor's review due to tax considerations.

You might also plan to give your family members a large sum of money during the holidays. A financial advisor can walk you through gift and estate tax exemptions. You want to know the total amount that you can give over the annual exclusion amounts, either during your lifetime or at death, before having to pay any federal gift or estate tax. You may want to work out a comprehensive plan to give during many holidays to come.

Financial advisors can also help you plan your estate for when you die, an important consideration if you're married or have children. A financial planner can help you, in conjunction with a lawyer, to figure out what happens to your money and possessions in the event of your death.

Reason 4: You need year-end help with debt management.

The end of the year can be a great time to reflect on how well you're handling your debt obligations. If you're facing a complicated debt situation, such as overwhelming credit card debt or medical bills, a financial advisor can help you clear the hurdles. You might also want to consider talking through your personal debt situation with a financial advisor at your company. These sessions are often free. Check with the human resources office at your company for more information on when you can sign up for a time for workplace financial planning.

Reason 5: You will get a raise or job promotion at the end of the year.

If you get a promotion or a raise through your job, you might want to talk to a financial advisor about how to handle a large jump in your salary. A financial advisor can help you determine how to responsibly handle your increase in salary and help you make a plan to continue to grow your wealth.

What Type of Financial Advisor Should Help with Your Year-End Planning?

What kind of advisor do you need? You can get an advisor with a wide variety of certifications. Here are three types of financial advisor certifications you can consider:

• Certified Financial Planner (CFP): CFP professionals meet rigorous education, training and ethical standards and can advise you on a wide range of investment and tax advice. CFPs must complete at least 1,000 hours of work before they become certified.
• Chartered Financial Consultant (ChFC): ChFCs don't need to achieve the same level of testing as a CFP but they must meet rigorous standards and have three years of experience in the field before becoming certified.
• Certified Public Account (CPA): CPAs help individuals and companies with financial planning, investments and taxes. They must complete specific educational and work requirements and pass an exam to become certified.

You always want to make sure that your financial advisor is a fiduciary. Fiduciaries are required by law to put your financial interests first over their own financial gain. Some financial advisors have a fee-only structure and will earn money by selling certain financial products to their customers. If you want to avoid this, check to make sure your advisor is a listed fiduciary. Visit napfa.org to check the database of fiduciaries.

In addition, you want to know how financial advisors get paid for their work. Many advisors charge an hourly fee and you should also expect a financial advisor to charge an annual fee, such as 1% to 2% of your investments.

Need Great Advice Before the End of the Year?

You may wonder how to find the right advisor. Ask around to your family, friends and colleagues. They may already be working with a fantastic fiduciary financial advisor right in your town.

Set up appointments or phone calls with a couple of potential advisors before you make your final decision. You want to make sure your advisor jives with your personality and understands your financial goals.

Getting your finances in order right now can put you in a great position before your new year's resolutions kick in.