Benefits of Hiring a Financial Advisor
Independence and financial independence are not the same things. There are benefits to a DIY (do it yourself) approach in life but not always in the realm of financial planning. Good financial planning requires experienced insight and solid advice for the future. It also requires objectivity sometimes challenging to achieve when managing your own money.
When experiencing financial stability there is a chance you will overlook opportunities to improve your situation. This is especially true if your finances seem steady enough. When experiencing financial hardships it is possible to think hiring a financial adviser is not plausible. It is also possible to feel the situation might be incapable of improvement. Financial advisers obviously care about their services having a positive outcome on your finances. They are also capable of removing emotion from the equation and of making choices based strictly on helping manage, and increase, your wealth. If you have been considering the services of a financial advisor, here is everything you need to know before you start.
The Problem with DIY Financial Planning
DIY projects are empowering and satisfy a need for independence. Still, not all DIY projects are done at an expert level. The ability to change oil or spark plugs in your own vehicle is not automatically indicative of an ability to safely replace an engine or perform an alignment. Trained, certified auto mechanics are hired to handle the bigger jobs because driving a vehicle with a faulty engine or worn-down tires can put you and your loved ones in danger.
While mismanaging finances is not the same as a car accident, the concept is the same. Why not put financial planning in the hands of an adviser capable of ensuring the best outcome? Financial advisors are trained professionals with unique skill sets. Those skills are honed to make the most of your money for you, so you can manage the rest of your life as worry-free as possible.
Financial advisers are trained to help manage and resolve debt management issues. Managing debt goes beyond simply owing money and paying it back. Future debt can be projected and plans set in motion to prepare for the payments.
College tuition is an example of potential upcoming debt. Moving to a larger house due to a growing family and consequentially taking on a larger mortgage can also be planned for. Weddings, whether yours or your child’s, are also examples of potential upcoming debt that can be planned for in advance.
Debt management includes more adverse situations such as paying off money-draining credit card balances and delinquent accounts. A financial advisor analyzes all your debts and makes calculations based on experience and facts. Perhaps the most poignant benefit of hiring a financial advisor is their ability to restructure your debt so the most damaging outstanding accounts are reduced and eliminated as priorities.
Building a Strong Retirement Portfolio
Planning for retirement is essential to having the best quality of life in post-employment years. This can be especially true if yours is the only income in the household. Either way, building a strong retirement portfolio is of major importance. Retirement funds do not have to be limited to 401(k) and Social Security Income (SSI), however. A financial adviser can help plan for your retirement by diversifying investments in the stock market, silver ETF (exchange-traded funds) or even reliable gold bullion.
Setting Attainable and Profitable Goals
Setting goals is generally a positive endeavor. Setting goals without proper planning, however, can sometimes lead to disappointments. It is important to make sure your financial goals are both attainable and profitable. A financial advisor can do just that.
Achieving long-term financial goals is a tiered process. Each step of the process takes planning and strategy and builds a solid foundation from which the next goal can be reached. Knowing your goals is the first step to attaining them. The skills and experience of a financial planner can help you navigate the best financial path toward making your goals achievable and profitable.
Objectivity and Perseverance
It is entirely possible to lose sight of the big financial picture when standing in the middle of it. Successful financial planning requires objectivity. While it might be initially uncomfortable to discuss your personal finances in such detail with a person you do not know, it is often in your best interest to engage the services of an objective planner. Financial advisors are trained to see the big picture for you, without emotion, and guide you to the best and most lucratively possible results.
Finally, designing a financial strategy and seeing it to fruition requires perseverance. It requires patience and dedicated focus. Life can be challenging, or at least distracting. Raising a family takes effort and time. Maintaining a home and a care takes time. While handling basic monetary tasks such as balancing a check book and budgeting discretionary funds are manageable, larger tasks such as planning for retirement and diversifying a portfolio can likely be better-managed by a skilled professional. In order to best enjoy life while also feeling confident about your long-term financial security, hiring a financial advisor is recommended.
Finding the Best Financial Advisor for You
A fiduciary is a person who acts in your best interest above his or her own. They are bound by law to do so. Your financial adviser should be a fiduciary to help ensure the best relationship and results. Where can you find qualified financial advisors?
The National Association of Personal Financial Advisors (NAPFA) is a great place to start your search. Simply enter your zip code on their home page and options near you will appear. A financial advisor who is a Chartered Financial Consultant (ChFC) does not necessarily have as much official education as a Certified Financial Planner (CFP), but both are competent with personal finance matters on a professional level.
General searches on public review sites such as Yelp can also be helpful. Word of mouth is a powerful tool in modern business marketing. The Financial Planning Association and Garrett Planning Network also have reliable search engines to help find the best financial advisor for you.