What is a financial advisor and do I really need one?
Some think that only wealthy people need financial advisors. Whether it’s a financial planner, wealth manager, money manager, retirement planner, or a slew of other similar titles, they generally all mean the same thing: financial guidance for people who want a strategy to achieve some future monetary goal.
Planning for life events
Eventually, we all experience some big life event, whether it’s paying for college, or buying a home, starting your own business, or caring for aging parents. Often times, your financial goals can overlap, collide, or simply seem unmanageable. A financial advisor will not only help you navigate the journey, but they’ll also work with you to prioritize your efforts. Sometimes you just need a more structured savings and investment strategy that can lead you to a more comfortable and less overwhelmed mindset.
Maximizing your current assets
Sometimes the help of a financial advisor is about managing the funds you already have. Many people use an advisor’s expertise to invest their savings and maximize the opportunity to put their money to work. They can help manage an investor’s tax liability, too. A financial advisor that specializes in tax-deferred investment vehicles can help you determine the most advantageous time to take a distribution from your retirement plan or identify beneficial tax-sheltered options.
Regardless of intellect, an investor may lack the appropriate knowledge when it comes to choosing investment options. Trying to balance the relationship between risk and return with your time horizon and your financial goals can be tricky. A smart investor seeks out and leverages the guidance of experts, even if they have investment experience. Don’t ever underestimate the value of professional advice.
Getting back on financial track
For some, their finances are one step away from crashing and burning. If you’re struggling with debt, a consolidation plan might be a wise first step. Financial advisors can develop a plan–not a get rich quick fix–where you’ll learn discipline, recognize your spending habits, and be held accountable so you can move toward improved financial health.
When you work through your goals with an advisor that has in-depth knowledge of your financial situation, you’re able to create realistic expectations and learn to plan accordingly. Recommending appropriate investment vehicles and a savings strategy can help guide you through the uncertainty.
While some advisors require a long-term arrangement, there are many who offer free consultations and no-obligation appointments to review your financial plan–or lack thereof. Check out the services offered by your local bank or credit union and set up a meeting. If they don’t give you a gold star and a pat on the back, they’ll be sure to recommend a realistic strategy. Either way, you win!