How a Financial Adviser Can Help You Improve Your Personal Finances

 Albert Cooper
  Jun 28, 2018

A financial advisor can help you put your finances in order and achieve both short-term and long-term goals. While the term financial advisor and financial planner can be used interchangeably, not all of them are equal. Besides, when it comes to personal finances, getting a one size fits all solution can be a futile quest.

If you want to get the services of a financial advisor, it’s important that you know how they can help you. At the same time, it’s important to know how to spot the differences between a selfish salesperson representing a service company and someone who is willing to offer unbiased advice.

What is financial planning?

Financial planning can be loosely defined as the process of establishing financial goals. For instance, you may want to know exactly when you will be spending your funds and the items that should take the highest percentage. After defining all the important goals, you embark on creating a solid and actionable plan that can help you realize the dream.

If a financial adviser is to give sound advice, they need to collect your personal financial information. The purpose of the data is to give a guideline when projecting how the laid out goals may be achieved. Basically, the projections are a function of several factors like savings, inflation, return on investments, and possible earnings.

You get expert help with planning your financial future

When you are just starting your financial journey, you have plenty of goals but the resources at your disposal are quite limited. Whether you want to repay your debts, buy a house, creating an emergency fund, or starting a family life; money matters can be quite daunting.

Most people are scared by the fees charged by financial advisors more so when you have tons of goals to deal with. However, the truth is that you can soon recover this investment if you are dealing with a great financial advisor. In fact, the financial plan you get can make a huge difference in your life in a matter of a few years.

If you intend to take huge realistic loans for the long term for your business, involving a financial planner can help you put things into perspective. While you can do the planning on your own, the dynamics of the business can make it difficult to make the right decision. A financial advisor will consider your finances and advise you accordingly. Since there are multiple loan products available, getting the opinion of a financial advisor can help you make the right decision.

You’ll be getting an impartial opinion and insight about your investments

The world is never short of self-made investors who operate without the services of financial advisors. Most of these DIY individuals feel they are savvy enough to keep tabs on everything happening in the industry. In fact, they feel that it's pointless to pay an expert a certain percentage of their returns just to get market insights.

The truth is that you might not be able to learn enough to rise to a position where your knowledge is at par with what the experts know. In addition, it’s easy to become biased when you are making a decision where you have vested interests. But when you engage the services of a financial advisor, you can make sound decisions and avoid losses.

Besides the fact that these individuals understand the maters of finance, they can offer great insight on an investment opportunity that you may be oblivious to. In the long-run, your investments might grow as a result of professional advice.

What to consider when getting a financial advisor

To ensure that you get the most out of a financial advisor, you need to consider several factors. As with all industries, these professionals may have significant differences which may influence the outcome of the planning session.

Based on the services you want to get, you can make a decision when settling on a specific choice. For instance, people who seek expert advice on how to select and manage their investments might want to consider a robot-advisor. At the same time, these options are cost effective therefore making it a great choice for starters. But if your case is unique and complicated, you might be better off with a human professional where you can take a holistic approach to the problem.

The cost of getting the service is another factor you should consider. Normally, robot-advisors tend to be cheaper and some don’t impose minimum account requirements. On the other hand, you might be required to pay premium charges when dealing with an experienced financial advisor.

The level of qualification can go a long way in improving the quality of the services received. Before settling on an advisor, always run a background check to determine the level of expertise. At the same time, you should ensure that the advisor strictly adheres to the fiduciary standard.

When should you seek financial advice?

There are multiple reasons why you may feel that you need to speak to a financial advisor. While most of the time will be spent on analyzing your situation, the real value of the process lies in the advice you are going to receive. If implemented judiciously, you can benefit from the insight.

If you are nearing retirement, you might want to discuss your personal finances with a professional. There are different strategies for handling your money after retirement and each person is unique depending on their profile. Therefore, choosing the best strategy can help your funds last longer.

Starting a family will definitely introduce additional challenges to your finances. Balancing your financial responsibilities can be a difficult task when you have to take care of your family. In such a situation, engaging a financial advisor can be instrumental in knowing how to handle your money.

Being a high earner or a high net worth individual carries some challenges especially when it comes to management of your money. While you can afford to save lots of money, prioritizing your investments can be daunting. A good financial planner can help you create the appropriate plan for dealing with tax as well as coordinating your investments.

Final words

While hiring an experienced financial advisor can be expensive, you can benefit from the insight they offer. Whether you want to stay on top of your finances or you want to ensure your investments are managed well, a financial advisor can be a good option.

How a Financial Adviser Can Help You Improve Your Personal Finances

Albert Cooper

Albert Cooper is a known content writer from California, USA. He writes content in different niches such as social media marketing, finance, business etc. He’s a daytime blogger and night time reader currently working as a chief content advisor for some business and finance groups. He enjoys pie, as should all right-thinking people.

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