If you are well-to-do, the best way to ensure you don’t lose your money is to invest smartly. The same goes if you’re working your way up the ladder, looking to build wealth and live comfortably. Now, you can educate yourself about the financial markets, master trading & portfolio management, and build up years of experience in a bid to become better at investing. Or you could cut to the chase and hire a financial advisor.
There has been some bad press about advisors and some people believe that they don’t always act in the best interests of their clients, but nothing could be farther from the truth. Especially if you work with a fiduciary advisor that’s bound by law to put your interests first at all times.
In this article, the goal is to help you understand why working with a financial advisor is in your best interests. Let’s get into it:
1. It’s easier to take advice than create a financial plan
The average person knows what they want from their investments: to earn profits. But how do you do that? Can you conduct in-depth research? Do you know which assets or markets provide the best returns? Can you monitor your fund for several hours every day? The answers to these questions show you the difference between knowing what you want and actually putting together a plan to accomplish it.
In truth, it’s easier to take advice from a professional than do everything yourself. The best advisors are great at those tasks above – even the ones that would be a problem for you. After all, researching investment opportunities and creating a profitable plan is their day job. So, in the end, the only work you have to do is find a trustworthy financial advisor and listen to their recommendations.
2. Online advice may not be as effective as working with a professional
A common retort to: ‘hire a financial advisor’ is “but there are so many blogs that provide smart recommendations on investing.” However, it’s not remotely the same. What you’ll find online is generic advice that works some of the time. This is because the writer or vlogger is talking to thousands of people at the same time. They don’t know your challenges or long-term goals.
On the other hand, good financial advisors offer counsel based on what you need. Before they come up with a plan, they consider your current status, where you hope to be in the future, and your risk profile. With this information, they can come up with a plan that’s tailored to you and more effective in the long run.
3. Long-term financial planning will protect your family
Moving away from you and what you need, hiring a trusted financial advisor is a great way to protect your family. Life is full of uncertainties, and it is essential to have someone that can help you navigate unforeseen circumstances and financial issues. Your advisor will evaluate your family’s insurance needs and provide advice on the appropriate decisions to take for the sake of your beneficiaries.
A comprehensive and professionally executed plan on insurance, retirement, and college funds can help secure your family’s financial well-being, even if you’re no longer there to take care of them.
4. Financial advisors provide an objective overview
You cannot manage your finances without your personal bias impacting your decisions. For instance, if you lost a huge amount of money in a particular market, you may never want to invest in it again. For the average person, it is difficult to take emotions out of investment decisions; this wouldn’t be a problem for a highly skilled professional.
Conversely, an advisor makes sure you’re not caught in the investment bubble. They provide insight on the risks and potential benefits of every asset because they know how products work in various markets. Additionally, they ensure you diversify your assets and help you avoid putting all your eggs in one basket.
5. An advisor protects you from choice overload
In the United States alone, there are over 10K exchange-traded funds (ETFs) and mutual funds. How do you pick the ones to invest in without being paralyzed by the overwhelming number of available options? Imagine going to the grocery store and seeing ten brands of butter or cheese. Sadly, in the case of investments, the downside to making the wrong choice is more serious than a week with food that tastes funny.
Financial advisors are at home in this situation. The best ones have a dossier that outlines all the funds and how they differ. They know which asset class will suit a client with a conservative risk appetite, and the one to offer to their risk-loving customers. Using the grocery store analogy, it would be like shopping with the person who ordered the different butter brands and arranged the cheese on the shelves.
If you’re worried that you can’t afford to pay for a financial advisor, get over that thought quickly. The solution is simpler than you’d expect: hire a fee-only advisor. By doing this, you only pay them a small percentage of the profits you earn from their investment advice. That’s a win-win for both parties.
Are you starting to consider hiring an advisor? Well, don’t rush into making a decision yet. Wait until after this consultation with our resident investment specialist. The meeting is FREE, it will only take about 15 minutes, and you don’t have to commit to anything during or after the consultation. Book your spot now.
