Money management can be intimidating and complex, no matter how little or how much you have.
You would not consider completing a marathon without first undergoing a rigorous fitness and some medical training. If you’re truly committed, you might also appoint a professional trainer to build a personalized workout that increases your chances of crossing the finish line.
Consider a financial advisor as a professional trainer but for your money. They evaluate your current financial fitness and health, learn about your financial goals, and build a customized plan for your future and current financial wellbeing.
5 Reasons Why You Need a Financial Advisor
While everybody’s reason for hiring a financial advisor is different, there are some commonalities, such as saving for retirement, starting a business, or losing a spouse. Here are five reasons why you need a financial advisor.
Ease Financial Complexity
Life can be hectic while juggling family, work, and other commitments; hence, the need to relieve financial planning is one reason most people are inclined towards a financial advisor. Moreover, wealth management demands complex planning that must address the totality of your wealth, and this can be challenging to do. At the same time, your hands are already full with work, family, and other commitments.
Smart Investment Decisions
Often people do not have the knowledge, confidence, or time to handle their investments. They have spare cash lying around, which they don’t know what to do with. Here is when the role of a financial advisor comes into play. They help you make smarter money decisions to help you manage and invest your money based on your income needs, risk tolerance, time horizon, and other key factors.
Saving for Retirement
Mostly people hire a financial advisor because they want to enjoy today while also plan for their tomorrow. People realize that financial decisions become more integral once they approach or enter the retirement phase. Thus, hiring a financial advisor can provide you a versatile and dynamic retirement plan that is personalized according to your needs.
Secure Family Future
Another primary reason for hiring a financial advisor is to secure your family’s future by making smart financial decisions. Maybe you have children whose academic future you would like to support by a college saving strategy. Or perhaps you simply want your family to be financially secure during your lifetime and after, with essential planning documents and insurance coverage.
Evaluate Tax-Saving Opportunities
Financial advisors can help you to assess tax-saving opportunities proactively. Any person would want to know how their investment or financial decisions impact taxes and, ultimately, their financial bottom-line. Hence, several people hire an advisor to manage their tax exposure at the business, personal, and estate level.
Professional decision-making, major life events, financial planning, and inheritance issues are few of the other many reasons why people hire a financial advisor.
Types of Financial Advisor
You can select which financial services you need or want based on the kind of advisor you choose. The three types of a financial advisor are:
Traditional In-Person Advisors: they offer a more personalized and hands-on financial guidance for an ongoing fee.
Robo-Advisors: they are an automated, low-cost portfolio management service, best for people who want help in managing their investments.
Online Financial Planning Services offers the low costs of a robo-advisor but with the holistic guidance of a traditional human advisor.
When to Hire a Financial Advisor?
If you need a plan for how and where to save, require help with investment management, or are struggling to prioritize your financial goals, you may want to hire a financial advisor. Financial advisors bring a professional and external view to your finances, take a holistic view of your financial position, and suggest improvements.
They can help you navigate complex financial issues such as estate planning, taxes, and paying down debt. Generally, a financial advisor should provide suggestions on how to recuperate your situation, including:
- Assist with budgeting and saving
- Plan to work towards long and short-term goals.
- Share investment products and account structures that are suitable in your current situation.
- Identify the appropriate investment mix or asset allocation for your portfolio.
- Help manage tax consequences.
With a financial advisor’s expertise and guidance, your portfolio will more likely remain on track towards your goals and be better adjusted for risk; hence, it is crucial to plan your financial future. Valuable guidance and suggestions can help you significantly to make better-informed money decisions.
All investing involves risk including loss of principal. No strategy assures success or protects against loss. Check out the blog section on our website to learn more about how you can improve your financial planning and wealth management.