Financial advisors help people manage their money, protect their families, and invest in their future. If you want to send your child to college, pay off your home in 30 years, or retire in 40 years, then a financial advisor may be just the right monetary manager for you. Perhaps you don’t make much money and think that you cannot benefit from a financial advisor. If you have any extra cash on the sidelines, then you can benefit. A good financial advisor can help grow small investments into larger assets over time.
Financial advisors help you to establish strategies for retirement, life and long-term care, and estate and legacy. Other important actions are setting budgets; saving for emergencies; partnering with you and your CPA to develop tax strategies to make informed decisions with respect to potential tax consequences of investment decisions. Your advisor will develop a financial plan to meet your personal and financial goals.
Your personalized financial plan will cover everything from budgeting, debt management, investments, portfolio construction, Social Security planning and retirement income needs. Debt management is just as important as money management. Financial advisors can draw up a plan to help you pay off debts and make the most of your income in a positive manner.
Your financial advisor will ask a lot of questions to understand your hopes, dreams, and aspirations. The first steps are to assess your level of risk towards market volatility and take a financial snapshot of where you are financially today. You will have a detailed discussion of how you want retirement to look. Are you still in the local area, do you have a mountain home, will you travel the world?
A financial advisor should assess any investments you own and how they fit into your portfolio. They will create a unique investment plan for your future. You can choose to take a low level of risk with a conservative portfolio. This type of portfolio usually generates more consistent but most likely lower returns year to year with a low level of fluctuation and risk of declines over time. A moderate risk portfolio will balance growth objectives with income needs. It will have a modest amount of fluctuation and risk of declines over time. A growth focused portfolio will offer a higher return potential in exchange for the potential to achieve a higher average return over time. A financial advisor will invest your money according to your time horizon and level of risk. They will also keep a watchful eye on your investments.
Perhaps you are self-employed or run a small business. There are many retirement plans available to business owners. Each is unique in its design and benefits to you as the owner. A financial advisor will work with your CPA to develop the appropriate business retirement plan that best fits your business needs and tax situation
In your protection strategy, your advisor will discuss the types and amount of insurance you may need. If you currently own permanent life insurance, a report can be requested that details how well your policy is working according to the illustration that was presented at the time of purchase. It can tell us if the policy has any potential issues and can lead to further discussions and planning. They will also discuss potential tax strategies with you and can work closely with you and your tax professional to make informed decisions with respect to potential tax consequences of investment decisions.
Your advisor can ensure that estate planning is complete by executing what you and your Estate Attorney have planned. This is important for the transfer of your estate to beneficiaries after your death by avoiding probate as much as possible. This is often a touchy subject and is much easier to speak with your financial advisor and estate planning attorney.
Your advisor will routinely check in with you to see if any changes need to be made to your overall financial strategy. Together you will make slight adjustments along the way as market conditions, your goals change over time. Listen to your financial advisor – it will help to secure your future. People don’t plan to fail. They just fail to plan.