Do You Need a Financial Advisor?
Do You Need a Financial Advisor?
Personal finance can be an intimidating concept. Knowing where to start with, how much to save for each goal, how much insurance to avail and how to pay off your debts etc, you need time, energy, and expertise. Most of the financial decisions that you make are life-shaping and are to supplement your long-term financial goals. Having a wholesome financial plan with a solid roadmap is thus important.
Most of you may believe that you don’t need professional advice to handle your finances as there is plentiful information available on a digital platform. But, you need them as your coach for your future financial fitness as you may not always have the time and expertise to do it all by yourself. Yes, time is an important element, time is money! There is a cost to prolonged wrong investment choices or delayed good money decisions. Hence, if you are confused or do not know where you stand in your financial life, it is worth hiring a financial advisor who can get you on the right path.
Here is why you need a financial advisor -
- To lay down SMART financial goals
Before you plan for your financial goals, it is important to identify your goals. A financial advisor helps you lay down SMART – Specific, Measurable, Achievable, Realistic, and Time-bound financial goals. A financial advisor will help you identify and understand your goals based on various factors such as income level, risk appetite, expectation on investment returns, etc.
- To craft a wholesome financial plan
A good financial advisor will only make his recommendations after crafting a wholesome financial plan for your long-term financial future. The financial advisor reviews your current financial circumstances, then considers anticipated changes and the goals (short-term, medium-term, and long-term) to make an assessment. Accordingly, make a wholesome financial plan for you to achieve all the goals.
- Help you eliminate emotional decisions
After crafting a financial plan for you to achieve your goals, a financial advisor strategizes your investments and chooses specific financial investment options to achieve those goals. The advisor makes an ideal recommendation based on your risk-return profile. A trusted financial planner helps you avoid irrational decisions driven by emotions as they weigh based on the suitability, the potential risk, and the return required to reach your goals.
- Helps you stay financially fit with constant monitoring and review
A financial advisor works very closely with you just like your fitness coach to always keep you on track and guide you. A financial advisor constantly monitors your investment portfolio, makes review and revise the investment strategy from time to time to keep it in line with your goals.
With the help of a good certified financial planner, you can organize your finances and have a clear vision on your retirement savings, paying off or restructuring plan for your debts, insurance cover, plan for big expenses, and investment strategy for each of your goals, tax planning, and estate planning.
Financial advisors are not just meant for sophisticated and wealthy people, everyone can seek professional advice for their long-term financial future. However, you probably do not need a financial advisor if you are just looking for one-time investment advice or just need inputs on a few investment options.
If you decide to seek expert help, make sure to go with a ‘fee-only’ financial advisor as they put your best interest first. Fee-only financial advisors act as fiduciaries, whose only compensation comes from the fees that you pay. That means, they do not earn from the specific investment options that they recommend. You could be assured to receive unbiased, rational, and professional advice from a fee-only financial advisor.
There is also an option of Robot advisors, which are virtual advisors who provide algorithm-based, automated advisory solutions. Though it is a cheaper option, fee-only financial advisory services provide you with skill and human supervision-based personalized services. It is worth hiring a financial advisor for greater financial security.
Disclaimer
This blog is meant for educating people about the importance of the right financial planning. The opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. It is only intended to provide education about the financial industry. Consult your financial advisor to get personalized recommendations based on your life circumstances.
About the Author
Sangeeta is a banker turned writer, firm believer of ‘the pen is the tongue of the mind’, an ultimate book lover, blogger, and a devote mom. She enjoys cooking and gardening in her copious free time! She is a gold medallist in MBA finance and has over six years of experience in banking and wealth management before she started as a writer five years ago. Learn more about Sangeeta here sangeeta maskeri - Financial Content Writer - Freelance | LinkedIn
Personal finance can be an intimidating concept. Knowing where to start with, how much to save for each goal, how much insurance to avail and how to pay off your debts etc, you need time, energy, and expertise. Most of the financial decisions that you make are life-shaping and are to supplement your long-term financial goals. Having a wholesome financial plan with a solid roadmap is thus important.
Most of you may believe that you don’t need professional advice to handle your finances as there is plentiful information available on a digital platform. But, you need them as your coach for your future financial fitness as you may not always have the time and expertise to do it all by yourself. Yes, time is an important element, time is money! There is a cost to prolonged wrong investment choices or delayed good money decisions. Hence, if you are confused or do not know where you stand in your financial life, it is worth hiring a financial advisor who can get you on the right path.
Here is why you need a financial advisor -
- To lay down SMART financial goals
Before you plan for your financial goals, it is important to identify your goals. A financial advisor helps you lay down SMART – Specific, Measurable, Achievable, Realistic, and Time-bound financial goals. A financial advisor will help you identify and understand your goals based on various factors such as income level, risk appetite, expectation on investment returns, etc.
- To craft a wholesome financial plan
A good financial advisor will only make his recommendations after crafting a wholesome financial plan for your long-term financial future. The financial advisor reviews your current financial circumstances, then considers anticipated changes and the goals (short-term, medium-term, and long-term) to make an assessment. Accordingly, make a wholesome financial plan for you to achieve all the goals.
- Help you eliminate emotional decisions
After crafting a financial plan for you to achieve your goals, a financial advisor strategizes your investments and chooses specific financial investment options to achieve those goals. The advisor makes an ideal recommendation based on your risk-return profile. A trusted financial planner helps you avoid irrational decisions driven by emotions as they weigh based on the suitability, the potential risk, and the return required to reach your goals.
- Helps you stay financially fit with constant monitoring and review
A financial advisor works very closely with you just like your fitness coach to always keep you on track and guide you. A financial advisor constantly monitors your investment portfolio, makes review and revise the investment strategy from time to time to keep it in line with your goals.
With the help of a good certified financial planner, you can organize your finances and have a clear vision on your retirement savings, paying off or restructuring plan for your debts, insurance cover, plan for big expenses, and investment strategy for each of your goals, tax planning, and estate planning.
Financial advisors are not just meant for sophisticated and wealthy people, everyone can seek professional advice for their long-term financial future. However, you probably do not need a financial advisor if you are just looking for one-time investment advice or just need inputs on a few investment options.
If you decide to seek expert help, make sure to go with a ‘fee-only’ financial advisor as they put your best interest first. Fee-only financial advisors act as fiduciaries, whose only compensation comes from the fees that you pay. That means, they do not earn from the specific investment options that they recommend. You could be assured to receive unbiased, rational, and professional advice from a fee-only financial advisor.
There is also an option of Robot advisors, which are virtual advisors who provide algorithm-based, automated advisory solutions. Though it is a cheaper option, fee-only financial advisory services provide you with skill and human supervision-based personalized services. It is worth hiring a financial advisor for greater financial security.
Disclaimer
This blog is meant for educating people about the importance of the right financial planning. The opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. It is only intended to provide education about the financial industry. Consult your financial advisor to get personalized recommendations based on your life circumstances.
About the Author
Sangeeta is a banker turned writer, firm believer of ‘the pen is the tongue of the mind’, an ultimate book lover, blogger, and a devote mom. She enjoys cooking and gardening in her copious free time! She is a gold medallist in MBA finance and has over six years of experience in banking and wealth management before she started as a writer five years ago. Learn more about Sangeeta here sangeeta maskeri - Financial Content Writer - Freelance | LinkedIn
