Most people know how important it is to create a solid personal finance strategy, but they don’t always know how to do it themselves. As a result, many put it off for later, waiting until they feel a sense of urgency — perhaps due to a life event, such as the birth of a child or a divorce, or the realization that their retirement planning isn’t as far along as they’d like. But procrastinating on your personal finances is a huge missed opportunity — after all, taking action today can pay off exponentially down the road.
Below, we’ve outlined a few of the top benefits of hiring a financial advisor, specifically a CERTIFIED FINANCIAL PLANNER® professional. If you’re thinking of hiring a financial advisor or just wondering how a financial advisor can help you, read on.
1. Working With a Financial Advisor Saves Time
Between work, family, socializing, leisure, and all of their daily obligations, most people don’t have a lot of extra time. And when they do, they’d usually rather spend it on something other than personal finance. While it is possible to develop your own financial strategy, it’s a complex topic. Unless you have a deep understanding of personal finance (including tax, investment, and estate strategies) and regularly stay on top of economic and market news, you may not have the time needed to get up to speed, stay up-to-date, and make well-informed decisions.
Working with a financial advisor allows you to take on a consultatory role, rather than owning the project yourself. With a trusted professional leading the way, you can spend less time in the financial weeds and more time doing what you enjoy, which might even include weeding your garden! This is one of the best benefits of working with a financial advisor.
Read More: Do I Need a Financial Advisor?
2. Advanced Access
Another benefit of working with a financial advisor is the amount of information available to them. After all, managing finances — particularly investments — can be an involved process. Of course, you’ll need to vet specific stocks, bonds, mutual funds, exchange-traded funds, and other investment vehicles before buying or selling them. But your accounts also need to be monitored and adjusted from time to time to ensure they’re aligned with your risk tolerance and supporting your personal financial goals.
In order to do that, though, you’ll need access to extensive information and research. In other words, more information than what you can find from publicly available sources such as the Wall Street Journal or Morningstar. One reason why you need a financial advisor is their ability to access certain information through software programs, trading platforms, third-party research, and other sources that are available only to those working in the industry. And because an advisor already uses these tools on a day-to-day basis, you won’t need to pay extra for them as you would on your own— the expenses will have already been baked into your fee.
3. Extensive Experience
Of all the advantages of a financial advisor, perhaps the most crucial is the professional knowledge they possess. With years of experience in financial planning and managing assets day in and day out of a variety of clients and situations, they’ve accumulated the knowledge needed to come up with and execute a sound financial strategy tailored to your needs. And because their jobs require them to stay on top of the latest financial news and research, you can trust that the recommendations your financial advisor makes are well-informed.
Why Use a Financial Advisor?
So you know financial advisors help people build and manage their personal wealth. But what is the role of a financial advisor specifically? Here are a few of the most common services they offer:
- Identifying and planning for financial goals: Creating specific monetary targets for different objectives, such as college savings funds, retirement plans, and estate plans, along with a strategy to reach those targets.
- Risk profile: Evaluating a client’s finances and goals to determine their tolerance for different types of risk, including market volatility, inflation, and longevity risk (The risk of outliving your assets).
- Investment analysis and portfolio building: Developing an investment strategy for each client based on their particular goals, timeline, and risk profile.
- Asset allocation: Creating a plan that places a specific percentage of funds in different asset categories — for example, stocks, bonds, and cash instruments — to balance opportunity and risk in order to reach your financial goals.
- Portfolio diversification: Spreading your assets across a number of different market sectors and industries to protect against volatility.
- Expense considerations: Reducing investment management expenses and trading fees through careful portfolio construction.
- Tax planning: Developing a strategy to reduce your tax liability, which means more money in your pocket.
- Coordinating with other professionals: Collaborating with any other professionals you may be working with — such as accountants, insurance agents, or attorneys — to ensure their efforts support your personal finance strategy.
- Ongoing monitoring: Tracking your portfolio to ensure it remains aligned with your goals and overall financial plan.
And beyond any specific project, another reason why financial advisors are important is they offer you peace of mind. They can serve as a one-stop shop for comprehensive financial planning no matter what life throws your way. You can rest easy knowing that you have someone on your side looking out for your best interest, someone who will contact you with any updates or recommendations.
Consider a Team Hewins Advisor
You now have answers to questions such as: “How can a financial advisor help you? and “What are the benefits of working with a financial advisor?” You may be wondering where to find a good advisor. At Team Hewins, we’re proud to offer fee-only financial advisors who have extensive experience developing customized financial plans that empower clients to reach their personal financial objectives, whatever they may be.
With an experienced CERTIFIED FINANCIAL PLANNER® professional in your corner, you’ll be able to sit back, relax, and let your wealth accumulate over time — so that you can enjoy the fruits of your labor. Contact us today to take the first step toward financial wellbeing. One of our advisors will be pleased to work with you.