Top 10 Ways a Financial Advisor Can Help You
While everyone knows about the monetary benefits a financial advisor can provide you, not many are aware of all the non-monetary benefits of working with a financial advisor, which sometimes can be just as important if not more.
1. Grow Your Assets
Numerous recent studies and market reports have consistently indicated that working with a financial advisor can increase the overall returns on your portfolio. Investors who work with an advisor have been shown to have almost 4 times the assets of investors who don’t work with an advisor over a 15-year period. And, despite the prevailing idea that advisors only work with the very wealthy, many investors who work with advisors actually have investable assets under $25,000 at the beginning of the advisory relationship. Not only does working with an advisor provide the opportunity to maximize your returns, it also can provide 9 additional benefits that we've outlined below.
2. Exceed Your Financial Goals
Advisors provide you with personalized financial planning and investment strategies to make you more money in the long term than if you simply managed it yourself. They provide a diverse set of knowledge in tax, estate planning, insurance, and many more fields that allow them to think of strategies that would ultimately allow you to capitalize on your financial planning.
3. Increase Confidence in Your Financials
Learning about personal finances and investing is a part of the process of working with a financial advisor. Many advisors make educating their clients about financial concepts a key part of the process. This allows you to learn more about why a financial advisor is making a specific recommendation resulting in you gaining confidence in your own finances. A sense of confidence can help relieve stress or confusion surrounding your financial future.
4. Analyze Your Current Portfolio Allocation
Given that advisors are finance professionals who have completed several pieces of training and are very well qualified with decades of experience, they are in a better position to advise you on where to invest your assets at a given time. This is because they have dealt with so many different financial problems over the years, so they are well aware of what works and what doesn't, based on your specific needs and goals.
5. Actively Manage & Adjust Your Portfolio
Advisors are very in tune with different sectors, financial markets, risks, current laws, taxation rules, and other areas of financial management. So, whenever a new problem or opportunity comes up, they will always be ready to help you make an informed decisions which will help you minimize investment risks. Your investments will be regularly reviewed and the importance of reviewing your investments cannot be stressed enough. It is only when you track the performance of your investments that you know their alignment with your goals. An independent financial advisor keeps a track of your investments and sends can you regular reports. Lastly, they are in the best position to advise you whether you should stay invested or withdraw funds based on current market landscape.
6. Develop a More Holistic Financial Plan
Managing your day-to-day finances, while balancing your current obligations and your future needs, can be complex and challenging. An advisor can help you see your financial life in a more comprehensive and integrated way, across all three stages of your financial lifecycle — from accumulation to generating retirement income to leaving a lasting legacy.
True holistic financial planning is far more than portfolio management. Advisors can help you see the big picture to make your most important decisions. They can offer solutions for risk management, insurance, and tax optimization. They can develop strategies, from financing your children’s education to caring for your aging parents, from helping you prepare for and live in retirement to creating an appropriate estate plan.
7. Protect You Against Market Risk
Numerous studies have shown that advisors are more likely than investors to focus on strategies to protect against market risk. Given how well they track the status of the market on a daily basis, advisors are in tune with the current financial market trends and will know what are the best strategies to deploy at what time in order to protect your financials. The market can really be a huge guessing game sometimes, but the advisor's job really is to help you take the guessing out of investing and put in more strategy and analysis.
8. Help Protect Your Loved Ones Financially
There's nothing worse than not being prepared for catastrophic, life-altering events. Whether it's death, sickness, or loss of a job, your advisor will make sure to outline all scenarios and help you plan to ensure that your family will always have the financial support they need, no matter what happens.
9. Worry Less About Taxes
Huge amounts of taxes on investments and assets can beat the very purpose of having them. A good financial advisor understands tax laws and arranges your finances in a way to minimize tax spending on investments. Even seemingly promising investments can turn out to be a wrong decision because of the associated taxes. An advisor will not only ensure you stay updated with the latest tax laws and amendments but that you will also have a defined tax strategy to minimize the impact on your overall investment strategy.
10. Eliminate Your Stress
The final, yet most important benefit provided by a financial advisor is the chance for relaxation. Having found the perfect financial advisor, you can properly achieve peace of mind about your finances, knowing that an investment professional is taking care of a wide range of challenges and questions that you would otherwise have to worry about all day and night.
You have more time for yourself because you don’t have to keep tabs on the market so closely. Your advisor does this for you and will contact if there is anything you two will need to discuss. And if you do have any questions or concerns, you know you can easily contact your advisor to get answers in a timely manner from a source you can trust.