Becoming savvy with every aspect of your finances and investing takes a lot of effort. Most people don’t have the time to learn it all. Help from a pro can be a huge advantage. Here are 10 reasons why you need a financial advisor.
10. Saving Time and Effort
The Internet is full of financial information. Unfortunately, it’s information overload. Where do you begin? Which financial information can you trust? Do you really want to spend the time it will take to sift through this vast mountain of information to figure out what’s good and usable? Choosing a professional financial advisor saves you time and effort.
9. Trustworthy Financial Advice
You’ve decided to skip the Internet and seek out a financial advisor. But how do you know who to trust? Look for someone who is a Registered Investment Advisor (RIA). This designation means they are held to strict fiduciary standards and must legally put their client’s interests first. They also must disclose every method by which they are compensated.
8. Accountability
A trusted financial advisor does more than give you financial advice and direction. They are also an impartial third party who will help you stay on track with your financial plan. When left on our own, it’s easy to lose steam, run off course, or fail to follow through. A financial advisor is there to help hold you accountable.
7. Exclusive Access to Investments
Having a financial advisor can sometimes give you access to investments you would otherwise be unable to achieve working alone. For example, certain mutual funds are only available through an advisory relationship. Reliable investment managers have an investment committee that regularly screens exclusive options to determine if they are suitable for their clients.
6. Better Preparation for Market Fluctuations
Financial advisors are highly skilled in managing market fluctuations. They have the tools and strategies needed to keep investments on track. Trying to time the market isn’t reliable. A good financial advisor reminds clients that jumping in and out of the market is extremely risky. Historically, those trying to time the market have shown a reduced return on their investments.
5. Market Savvy
It is part of a professional financial advisor’s job to keep informed of changes in the market. In terms of account management, financial advisors strive to stay aware of specific details that can affect the individual investments of their clients. A trusted financial advisor assists clients in staying up to speed on market conditions to help them make better decisions.
4. Tax Planning
A crucial factor in successful investing is tax planning. A financial advisor can structure your investments into the appropriate accounts to maximize your tax savings. They can guide you through complex tax strategies, such as loss harvesting. A trusted advisor will help you avoid tax penalties ensuring you don’t withdraw money from the wrong account at the wrong time.
3. Experience
It’s important to choose an experienced financial advisor. Look for someone who has weathered market fluctuations and various investment vehicles over and over. A wise investor has insight you’re unlikely to have experienced on your own. A financial advisor can offer guidance beyond generalized investment advice and schemes that may not fit your specific needs.
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2. Guidance to Achieve Your Goals
Most people have goals for their financial future but lack a step-by-step strategy to get there. A trusted advisor can isolate the building blocks required to structure your financial future. They can discuss your “hopes and dreams” and help you make informed and educated decisions on whether you are on track to reach your goals and what to do next.
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1. Less Stress
Planning for your financial future, educating yourself on investment strategies, keeping track of the market, and implementing the necessary moves are a lot to keep up with. It’s a stressful endeavor. However, when you partner with a trusted financial advisor, you can hand off a huge chunk of those worries to an experienced professional. It becomes one less stress.
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