Why you need a financial advisor

In this segment Jim Pavia, senior editor at large for CNBC Digital's Financial Advisor Hub, provides insight as to why just about everyone—in every wealth category—can benefit from the assistance of a financial advisor.

"Let's be honest with ourselves. Even if we grade on a very generous curve, a majority of Americans would flunk when it comes to financial literacy and understanding basic money matters," Pavia said. In addition, the inherent—and ever-increasing—complexity of the modern U.S. economy makes it easy for the average wage earner to fall ever more behind.

"Whether taking out a student loan, buying a house or trying to save for retirement, people are being asked to make decisions that are difficult, even if they have graduate training in finance and economics," Pavia noted.

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Young people, in particular, "don't understand the concept of compounding interest," he said.

The earlier people start to save, the more secure they will be in retirement, Pavia explained.

"You start with a retirement plan at age 22, and that money works for them and grows in that IRA for, say, 40 years, all of a sudden this young person is looking at $2 [million] or $3 million at the end of the rainbow."

What's more, the once-secure days of lifetime jobs, pension plans and corporate hand-holding are over—probably for good. "These days, there are 401(k)s not pension plans," he said. "People are being asked to create their own retirement plans [and] to take on a lot of responsibility."

So what's a person who is less than literate in personal finance to do? Hire a financial advisor, for starters.

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"I believe individual investors at every age level can benefit from the financial know-how of a financial advisor," Pavia said. That includes people earning $30,000 per year as well as those raking in $30 million, he explained. "The belief that only the rich or 'uber-wealthy' require the assistance of a financial advisor is simply not true. After all, everyone—at any financial status in life—wants to be comfortable and happy and to have some financial security," he said.

Through a series of special reports and video segments, CNBC's FA Hub provides investors with straightforward, informative and relevant content that will make investment planning and strategies more transparent and easier to understand.

—By DaVida Plummer and Kenneth Kiesnoski, specials to CNBC.com


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