by Scott Newton22.04.21

When debt is overwhelming you, it might feel counterintuitive to fork out for anything other than bills and repayments. However, while at a fee, financial advisors can be your pathway to escaping a debt crunch with solutions that provide the best outcomes for your specific situation. Getting out of debt is a lot more than ‘earn more money, spend less’. It is rarely that simple, and can be made even more confusing and complicated if you’re working your way through it alone. So, what are you paying for when you enlist the help of a financial advisor?

Firstly, what is a financial advisor?

Essentially, financial advisors are qualified and experienced financial professionals who have a deep understanding of how to achieve financial goals and escape crippling debt. Their knowledge means they can advise you on solutions and pathways that you may not know existed, or did not know they were applicable to you. They can also take the fear and stigma away from debt solution outcomes (especially for solutions like insolvency and bankruptcy - while they are often pitted as doomed outcomes, they can sometimes be the most positive step forward). 

How can a financial advisor help me get out of debt?

The best function a financial advisor provides is clear paths to your best case scenario out of debt. They can help you streamline your debts and repayments, offer pathways to get out of certain debts faster and create realistic and sustainable strategies for working through those debts. Financial advisors can also ensure that you are aware of the protocols required for some solutions (such as bankruptcy) and guide you through the aftermath. It’s not all doom and gloom, financial advisors can not only pull you through your debt, they can help to set you up for the future to avoid facing the same situation again.

Is it a good idea to enlist a financial advisor when I owe money?

In the long run, you will be financially better off to have a financial advisor guide you through your finances than to continue on your own, if you’re feeling overwhelmed without a strategy. The costs you could be saving that could be absorbed back to your creditors, the unnecessary interest accrued while you attempt to find solutions, or having incorrect assumptions (both that you are in worse condition and better condition) about your financial health can cost you far more than the fee of a financial advisor.

Financial advisors’ immense knowledge on how to best organise, structure and manage your finances can make a big difference to your short, mid and long term financial goals and needs.