A ﬁnancial advisor guides how, where and when to invest. Their advice could be for a healthy ﬁnancial plan or individual investments made towards a larger ﬁnancial plan. Financial advisors advise choosing the ﬁnancial instrument, deciding how much to invest, reviewing frequently, and taking corrective measures if needed.
Why do we need a ﬁnancial advisor?
You might often think that there is plentiful information on the web about investing – then why would one need a ﬁnancial advisor?
Because a ﬁnancial advisor specialises in providing ﬁnancial advice to customers based on his expertise and requirements, while you could be aware of your needs and the way to go about investing for it, you may not always have the time to do it all by yourself, says John Bonavia. Here is where a ﬁnancial advisor takes the responsibility from you onto him.
Here are some beneﬁts of engaging a ﬁnancial advisor for your investment and ﬁnancial planning needs:
• Understanding your investment needs and chalking out a ﬁnancial plan:
One of the very ﬁrst steps while chalking out a ﬁnancial plan is to understand the need and purpose. Your ﬁnancial advisor understands you, your needs and future goals and accordingly draws a long-term plan to fulﬁl them.
• Financial expertise:
A ﬁnancial advisor brings with them expertise in the ﬁnancial markets. They undergo several pieces of training and carry certiﬁcations to secure the title of a ﬁnancial advisor or an investment advisor. And thus, engaging a ﬁnancial advisor to help build a portfolio, chalk out your goals, and help track it could be a good idea.
• Helping you choose the ideal path to be ﬁnancially ﬁt:
Once you decide on your goals, your ﬁnancial advisor will help you choose speciﬁc investment options to achieve them. Your advisor would help you choose the appropriate ﬁnancial instrument basis your risk-return requirement and match it with the appropriate ﬁnancial instrument.
• Regularly monitoring your portfolio:
A ﬁnancial advisor helps you monitor and reassess the investment performance as you may not always have the time to do it. Regular monitoring of your investment portfolio is necessary to ensure the alignment of your investments with your ﬁnancial goal.
• Revising portfolio from time to time:
An investment portfolio needs review and reallocations depending on the market situation and changing needs. An advisor would suggest revisions based on his expertise and market situations in such situations, says John Bonavia.
According to John Bonavia the role of a ﬁtness coach is similar to that of a ﬁnancial advisor – both carry expertise, both ensure a sound ﬁtness plan – whether physical or ﬁnancial and both help in monitoring and ensuring the effective progress of the plan during the long term.
When deciding on the type and scope of advice you might need from a financial advisor, it’s important to ask the right questions about your money needs and assess your comfort level in managing your finances.