8 Reasons Why You Need a Financial Advisor
To understand the benefits of a financial planner, we need to know that the fast pace of life in the current times has left people with little time to devote for themselves. Be it for their physical health, mental wellbeing or their financial health. Parallel to this, finance and investment sector is advancing in leaps and bounds with many new avenues of investing being added every year to the complex world of investment and wealth managements
In such a scenario, an individual working hard to earn a decent living might not have enough time to spare for the study and research it takes to invest money in the best possible manner or to manage his wealth to avail optimum benefits. Thus, enters a who specialized in guiding people to their financial goals.
There are many different categories of financial advisors and each has a different style of working. There are registered investment advisors who provide you an unbiased option and advice regarding your investments. This can be either for investments in capital markets or for your overall asset allocation for your investments.
Then there are certified financial planners who help in your financial planning for a and this is one of the most highly qualified position as it requires, clearing of exam and certain years of practice to qualify as a CFP.
Thereafter is a chartered financial analyst (CFA) who mainly analyses stock markets and mutual funds and performance of other financial institutions.
There is a difference between these, and you must choose for yourself as to whom do you need the most. There are many reasons for which you may need a investment advisor. Let’s look at some of the most common ones
8 Reasons to Use a Financial Adviser
1. To Keep Your Investment Plan on Track
Investing money is never really a joyful experience unless it gives sure shot returns on a regular basis. Investments often reduce the amount of money you would have otherwise chosen to spend on luxuries. Hence, the temptation to use that investment capital elsewhere is forever present. You need a financial advisor to remind you of the reason why you chose to invest money in the first place and not let to go astray and spend your investment amount on depreciating assets or luxuries
2. To Rebalance Your Investments
People who do not have a financial advisor tend to invest their money and forget about it. This is a dangerous practice. Each investment needs constant monitoring and rebalancing at regular intervals. A good financial advisor doe this rebalancing for you and keeps a check on whether all investments are yielding results or not.
3. To Plan Your Taxes and Save Them
Just like nobody likes to invest money, nobody likes to pay taxes either. There are a lot of schemes, offers, plans and investments, where an investor does not need to pay taxes on the capital gains or invested capital. A financial advisor knows about all these avenues and can help you plan your taxes and save them in the best possible manner.
4. To Plan Distribution of Your Acquired Wealth
This might seem rude, but preparing for any exigencies is extremely important and a financial advisor helps you in planning your wealth distribution after your death, in the most efficient way. This is called estate planning and is done using an estate attorney.
5. For Your Retirement Planning
As people have started being more aware and conscious about their future and ensuring a safe and secure life for themselves always, retirement planning has come up on the top of the list among millennials who wish to enjoy a good lifestyle for themselves post retirement. A financial advisor’s one of the most important role is to help you understand how much you need to have for a comfortable life post retirement, and which investments to use up once you near your retirement age.
6. To Keep Your Emotions in Check
Sometimes in event of losses, you might not be able to think straight with respect to your invested amount since it is your hard earned money. A financial advisor at this time would come to your rescue and help you think rationally about your positions and make the best and most unbiased decision for improving your state of affairs.
7. To Save Your Time and Efforts
Chalking out a solid investment plan, after thorough research of all options and all the factors associated with each investment instrument, needs a lot of time, effort and also expertise. When you are planning your investments, you need to keep in mind everything from the past performance of the product to your risk appetite and your investment capital. An investment advisor can help you in the best possible manner and can also save your time and effort required to do this research. On your part, you only need to furnish the necessary information and your requirements to the financial advisor.
8. To Give You the Second Opinion on Your Decisions
Financial advisors have the expertise to evaluate and assess each investment opportunity and also the current standing of an individual with respect to his investments and financial position. So, even if you have been able to do your research well regarding your investments, a financial advisor and especially a registered investment advisor and a certified financial planner would be a good second opinion for you with regard to your investment advice.
Conclusion
Keeping in mind all these points, it is advisable that you get in touch with a financial advisor as soon as you start earning. Starting early on the path of financial planning and investments goes a long way in securing your financial freedom and security and making you achieve your financial goals much sooner.
Author
CapitalVia
Pioneer in Investment Advisor
