Sometimes when we know we should do something, but we’re afraid of making the wrong move, we make no move at all. This can be a costly mistake when it comes to long-term financial planning.
Soliciting financial advice is an important venture, but also a personal one. It can seem like an imposing, if not impossible, task: what do you need to know; when should you start; and how do you know who to trust?
We’re answering those basic, first-step questions: what exactly is financial advising; why should I use it, when should I use it, and who should I use?
What is Financial Advising & What Does a Financial Advisor Do?
Financial advising is comprehensive advice and consultation for investments and long-term financial planning. Financial advisors understand and navigate complex financial issues, coordinate beneficial strategies for savings and growth, and tailor plans and recommendations based on their clients’ individual needs and goals.
A financial advisor can help plan for retirement, execute sound investment strategies, manage investment and retirement accounts, find solutions for life insurance, and help clients plan for college, long-term healthcare, or wealth transfers.
Why Should I Use a Financial Advisor?
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Money
The main reason for using a financial advisor is the material reward. Those who seek financial advice typically end up with about 15% more retirement savings than those who do not. That alone is reason enough to secure a good financial advisement firm.
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Time
Another reason for enlisting a professional’s help is time. This reason is not just a priority in terms of age and growing closer to retirement, but in terms of how you choose to spend your time.
Exploring all the financial and investment solutions, understanding all the ins and outs, educating and reeducating yourself, keeping track of economic upturns and downturns, legislation changes, and industry evolutions – this all takes an enormous amount of time and commitment.
Rather than burden yourself with these responsibilities (which you may, at times, neglect for more visible ones, such as family, work, and health) it’s ultimately wiser to employ the skill of a financial advisor who will solely focus on fulfilling your financial goals.
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Proficiency
On a similar note, a financial advisor will not only give you the gift of time, but the gift of financial fluency. They will be an expert in your corner who can help organize your finances, stay on track for your goals, implement sound strategies for maximum return, address any past errors-in-judgment, and address impactful changes so that you can make necessary adjustments – essentially demystifying financial advising and simplifying your life.
When Should I Seek Financial Advising?
The obvious – and short – answer to this question is now. Today. But there are lots of other answers as well. You should engage a financial advisor…
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Before a crisis hits.
A personal catastrophe, like a long-term illness, or a more universal catastrophe, like the Covid-19 pandemic, are events better prepared for well in advance – not when you’re a day late and a dollar short.
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Before making a big decision.
A financial advisor is an objective voice who can lay out all the pros and cons of whatever path you’re contemplating.
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When you’re developing a long-term financial plan.
Whether it’s retirement, paying off a house, saving for college, estate planning, or investment options, a financial advisor can lay out all your options.
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When you’re approaching retirement.
A financial advisor will make sure you’re on the right track.
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When you’ve just inherited money or come into a large windfall.
It can be overwhelming when you suddenly receive a large amount of money. Solid financial advice is the key to spending and investing wisely.
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When you’re about to marry the person of your dreams.
Before getting married is the right time to seek advice on money management and make sure you’re on the same page financially.
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When you’re recently divorced or widowed.
After a change in marital status, it may be prudent to seek out a financial advisor, so you can understand what adjustments you should make.
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When you’re taking care of older parents.
A financial advisor can ascertain the best solutions for taking care of them financially.
Find a Financial Advising Partner
Now that we’ve answered the what, why, and when of financial advising, let’s talk about who. Financial advice makes such a big impact on your life and your family’s life that you can’t take it lightly. You need someone you can trust to look out for your best interests.
Once you’ve identified your financial needs, be sure to find someone who aligns with your goals who will be able to support you every step of the way. Review the range of options, including online and traditional advisors, and find someone within your price range. Finally, be sure to thoroughly vet their background and credentials to be sure that you can trust them with your financial future.