The benefits of a financial advisor are numerous, and with good reason. Most financial advisors work with people at all stages of financial and retirement planning, from all walks of life, and with various wealth goals.
The right financial advisor provides clarity, creates a plan for your future, guides your personal finance goals, and helps you achieve the peace of mind you desire about your financial affairs.
Consider how this professional could change your financial outlook. No matter if you have spent years building your portfolio or if you have not started yet, the support of an advisor is always beneficial.
Why You Should Consider Hiring a Financial Advisor
A financial advisor may be a good decision for anyone who wants to build financial health. Some of the key reasons to hire a financial advisor may include:
- Retirement planning
- Investment education and decision-making
- Tax planning
- Business investments
- Estate planning
- Rebalancing investments
- Reduce financial stress
- Debt management
Realizing financial advisor benefits is possible for anyone. You do not have to be wealthy or have significant assets to work with a financial planner. You do not have to have established financial goals or know anything about the financial markets. On the other hand, the support of a financial advisor if you have a large investment portfolio or are going through significant life changes, such as divorce, having a child, or getting married, can also be beneficial.
If you’re considering the benefits that come from financial planners, take the time to find one that can help you with your specific needs and financial objectives. You can get matched with a financial advisor with us in just a matter of minutes.
How a Financial Advisor Can Help You
What can financial advisors do? As educated, certified financial professionals, financial advisors provide specific strategies for the management and growth of wealth. Working with a financial professional at any stage of your life can be critical. Some of the core benefits you could see:
#1. Personalized Strategies to your Unique Situation
One of the core benefits of financial advisors is their ability to create a customized financial plan for you. With so many financial products and investment options available today, it can be hard to know where your money is best served. With the help of an advisor, you gain insight into:
- The strategy best suited for your goals (and help define what those goals may be)
- Diversification to reduce risk in achieving your goals
- Guidance and financial education
- Support in controlling your finances
- Strategies that can be changed as needed as markets shift or your needs change
Building a Retirement Roadmap
Consider that, according to data from the U.S. Bureau of Labor Statistics, in March of 2023, 70% of American workers within the private sector had access to a retirement plan, but only 53% were participating in them. Planning for retirement is complex, and there are so many avenues to consider. A financial advisor can help you with:
- Identifying the type of retirement objectives you have.
- Determining the types of financial products that should be in your investment portfolio for your current risk tolerance.
- Planning for lifestyle goals, including traveling or hobbies
A retirement planning roadmap is always dependent on your goals and objectives, and the sooner you put a plan in place, the easier that can be. A financial advisor helps you know what types of investment strategies will yield the best results in your situation.
Plan for the Unexpected
A good financial advisor knows there’s no straight line from where you are to having as much money as you expect. There are changes throughout life, and your advisor can help you plan for what you otherwise may not be able to, including financial stressors, unexpected illness, and changing investment goals. This may include
Divorce and Inheritance
It’s critical to consider the unexpected, including the potential for divorce. Your financial planner can help you create a cohesive plan to accommodate these major life-changes.
Also don’t overlook the value of working with a financial advisor who can help you create a plan for inheritance. You may want your children or grandchildren to inherit from you, for example. Build that into your current retirement plan.
Risk Management
Risk tolerance is a term used to refer to how much risk you are comfortable with at this point in your life based on your current financial situation. A component of a personal financial plan is to understand how much risk is a good thing right now and what may not be. Their investment advice is always specific to your age, income, current financial situation, and expected goals.
Estate Planning
Retirement accounts are just one component of estate planning. You also need to consider investment products that could help your family after you are gone, such as life insurance, trusts, and wealth management strategies that minimize taxation.
Your expectations in these areas allow your wealth manager to create a savings plan that aligns with your goals and expectations. If you know you want to support a charity with a contribution after your death, for example, your advisor can help you create a plan. If you want to leave behind a specific amount of money to each of your children or grandchildren, the financial advisor helps you choose the appropriate asset classes and strategies for reducing any losses after your death due to taxation.
#2. Ensure Accountability and Monitoring
Your financial advisor is more than just the person to put in place a financial plan. They also stay with you and monitor it over time. One of the benefits of human financial advisors is that they get to know you and can offer specific investment management strategies to fit your needs, including in each of these areas.
Regular Progress Reviews
Should you be changing up your asset allocation from mutual funds to alternative investments? Perhaps you should be moving into less risky stocks while the markets are shifting. These are decisions a certified financial planner can make for you. It all comes down to knowing where you are right now and where you plan to be.
With routine progress reviews, the right advisor can ensure you are consistently working towards your objectives and, when necessary to achieve your best interests, can make changes for you. Expert advice on where, when, and how to invest in these progress meetings is also a nice advantage.
Staying On Track with Your Budget
When you’re in the middle of your life, your priorities change, and suddenly, that second home in the mountains sounds like a must-have investment. Or, you may suffer an illness that has a significant impact on your earning ability. Your advisor offers expert advice on how to stay within budget when life changes.
They tell you what you can and should do, changing up your investing methods and working to provide honest financial advice in tough situations.
Investment Performance Monitoring
Investment portfolios change often, and the job of your financial advisor is to monitor those investments and make changes when they need to do so to help you stay on track. Hiring a financial advisor gives you the ability to count on an expert to make decisions about when the right time to switch out your investments is or how to make adjustments to your asset allocation as market conditions change.
Are you ready to find a professional who can help you? Not all financial advisors are the right fit, but we can help you. Use our free advisor match tool as a way to find a professional who can offer clarity.
How a Financial Advisor Can Support You
There’s so much more a financial advisor can offer, within the goals and needs you have. Depending on who you work with, you may notice a number of specific benefits in terms of support.
1. Offers You Emotional Support and Discipline
Setting financial goals is easy. Working towards them is harder. Many people struggle with financial discipline, and while your wealth managers will not tell you that you cannot do something, they will provide advice that’s objective and backed by financial clarity. That is, they are transparent with you about what the risks are if you take one route or the next. That sports car at 59 ½ may not be right for your retirement goals. Wealth managers may also provide insight into when starting a new business, which could be a good (or bad) idea, for example.
2. Saves You Time and Effort
You could use a robo advisor, but they do not match when it comes to the personalized service provided through a human advisor. Robo advisors are faster because they are automated, but they don’t know you, learn what matters to you, nor provide you with hands-on support when changes occur.
If you plan to use these tools (and there are some reasons to do so), you have to consider the work you need to put into them. These tools use computer algorithms to make decisions. However, that’s always based on past outcomes. If you plan to do your own investing, you will need to study financial reports, gain insight into how well one strategy could work for you over another, and consider risks from an objective view.
Or, you could turn to advisors who can do that all for you with the education and training to minimize risks.
3. Optimize Cash Flow Management
Keeping your finances on track means monitoring and controlling spending. One of the services provided by some financial advisors focuses specifically on this: optimizing your cash flow so you are not spending more than you are making.
- Should you pay off your debt or save more for retirement?
- Should you cut back on your spending so you can reach your financial goals?
- Are you able to afford a new asset right now without going into debt?
How a Financial Advisor Can Guide You
Hiring a financial advisor empowers you. With a registered investment advisor by your side, you can count on some pretty important details that could help you with all aspects of financial planning.
Step 1. They can provide expertise and insights.
Financial advisors can provide insight into financial decision-making because they have a high level of training and are certified. It is their job to know what the best decisions are for your situation. They can use key findings in market conditions, changing financial climates, and other financial matters to provide transparent, accurate insight into what you should be doing right now.
Step 2. They offer tax optimization strategies.
Financial advisors also provide clients with insight into how their decisions about spending and saving impact their taxes. From a wealth management perspective, they can offer insight into what you can expect, including in areas such as:
- Reducing taxation after death to protect your wealth
- Crafting strategies to help you get out of tax debt
- Supporting you in optimizing retirement planning strategies to reduce as many fees and taxes as possible each year
Step 3. They help you stay informed.
Working with a financial advisor also ensures you maintain all compliance requirements in relation to your finances. That could include any legally required reporting, tax requirements, or financial obligations you have over time.
Finding the Right Financial Advisor for Your Needs
With these financial advisor benefits, it is hard to see a reason not to work with a professional. Yet, as you meet with prospective advisors, ask questions. You will find that some offer low fees or a flat fee, a range of investing solutions that allow you to pick and choose what you need, and exceptional insight from that first meeting with you.
If you’re ready to embrace building financial worth, you need the best financial advisor available to you. Find a financial advisor near you today and get the process started.
