Situations When You Need a Chief Financial Officer

Jenny Handwerk |

Situations When You Need a Chief Financial Officer



As you look through your finances, you may be wondering if you need a chief financial officer. The answer is based on your financial status. However, you can benefit from a financial advisor's expertise in most circumstances.

Learning about your wealth preservation alternatives is essential for planning your financial future. This knowledge may come from a variety of personal finance resources, including peer groups, white papers, books, and blogs, but there are occasions when you should look out for the guidance of a financial professional.

When it comes to money management, you don't want anyone—including yourself—to make mistakes. However, there may come a moment when you need to call in reinforcements and hire a chief financial officer, particularly if you are making major financial decisions.

Not everyone's financial condition necessitates further assistance, but you may sometimes require it. Here's how to determine whether hiring a chief financial officer suits you.


You are Closer to Retirement 

As you approach retirement, you must weigh income streams, investments, and lifestyle options. A chief financial officer can be a lot of help in developing a retirement income strategy that will allow you to live the lifestyle you want without worrying about outliving your resources. He can also assist you with Social Security, withdrawals from retirement savings, and healthcare. 

For many people, planning for retirement might be overwhelming. Managing things as you become older may become more complex. Having a Chief Financial Officer who assures a consistent source of income for the duration of retirement may be beneficial. 


You've Recently Inherited a Significant Amount of Money

Receiving an inheritance can be a huge benefit for some people. However, it can be difficult, particularly if you lack financial planning and investing knowledge. The last thing anyone wants to do is waste money received from a loved one. As a result, developing a strategy is essential. Depending on the size of the inheritance, you may want to consult with a chief financial officer.


You are relatively young and might want to build wealth


Early planning never leads to a loss. Instead, it provides a person with a clear mind to focus on other vital aspects of their lives. An skilled advisor can assist in developing an effective strategy for managing existing and future resources. 


You're in the Process of a Major Life Change


Untangling your finances from your spouse is difficult if you're going through a divorce. A chief financial officer can lead you in making sense of the data and charting a prudent strategy for the future. Practical, unbiased counsel can be beneficial, especially if you need to get used to handling household money. A divorce is not the only situation where advising support may be appropriate. Any substantial change or high-dollar matter may demand professional help.



To Safeguard Savings

The pandemic brought to light people's underlying worries about their financial savings and a sense of loss of control. As we emerge from the epidemic, customers must prioritize conversations with their chief financial officer about protecting their investments and assuring lifetime income in the future.


You're changing careers.


A professional shift, whether intentional or unintentional, can significantly impact your finances. You'll need to adapt your financial plan to reflect your new income and benefits, look into chances for upskilling, and ensure your savings and previous retirement plans stay on track during the transition. Consider how many people, when moving employment, make the error of leaving inactive 401(k) accounts.


You Have People That Depend on You


A chief financial officer can be beneficial if you have dependents, regardless of age or retirement timeline. If something bad occurs, an experienced expert can assist you in ensuring they are cared for. This often includes assessing your risk exposures, developing an optimal insurance plan, and adopting a long-term investment strategy. It can sometimes involve estate planning.


Preparing To Sell Your Business Or A Major Asset


The one area that frequently costs business owners the most is failing to plan for capital gains tax avoidance before the sale of a significant asset or firm. Frequently, a customer will sell an asset or business and seek strategies to avoid paying a considerable capital gains tax payment. Instead, a customer should collaborate with their advisor to develop an exit strategy before the transaction, as it is frequently too late after the fact.



Final Notes 


At every unexpected turn or joyful milestone, the experience of a financial expert can assist you in strategically planning for life's financial events, rather than simply responding to them. With this proactive strategy, you may convert potential stress into concrete results.