Financial success requires a plan. While most people can manage their finances just fine on their own, not having the guidance of a financial advisor could mean you’re not doing as well as you could be. These days, financial advice and planning aren’t just for the rich. It’s for everyone. The education and experience of financial advisors and planners can help you protect what you have and build upon it. They are here to help you make the most of your investments while securing the long-term future for you and your family.
There are a lot of tools available on the internet to help people manage their finances. Everything from a retirement calculator, mortgage calculator, and even a variety of personal finance apps are all out there waiting to be used. However, none of these things make up for the expertise of someone who understands the highs and lows of finance. Having personal financial advisors on your side could make a huge difference when it comes to your financial goals.
What is a Financial Advisor?
Somewhere along the line, people started assuming that a financial advisor is something set aside for those with high net worth. The truth is the terms financial advisor or financial adviser are just generic job descriptions. The titles financial advisors or financial advisers cover a wide variety of various financial services. For example:
A Certified Public Accountant (CPA) takes several tests to get their certification. Afterward, they help with various aspects of accounting including taxes and tax planning, financial consulting, and other business services such as mergers and acquisitions.
A Personal Finance Specialist (PFS) is a CPA who has more education and experience and has passed more tests to become a PFS. They tend to help with more areas of financial planning.
A Certified Financial Planner (CFP) must also pass a test for certification and have work experience. They also agree to a code of ethics. CFPs have more expertise in insurance, taxes, retirement planning, and estate planning.
These are just a few of the financial experts working under the title of financial advisor. Some financial advisors have more than one license to better serve their clients. For example, a CPA may also be a CFP. When looking for a certified financial planner or financial advisor it’s important to find one with the education and experience in the area of finance you need assistance with.
A qualified financial advisor is so much more than many people realize. Our goal is to help you on your path to your financial goals to achieve the future you desire for yourself and your family, which is something everyone deserves.
A comfortable retirement and a bright future aren’t exclusive to the wealthy. An experienced financial planner will sit down with you and talk to you about what you want your future to look like. They’ll offer their experience and expertise to help you consider things you may not have thought of before. Here are some of the reasons you should work with a financial advisor.
1. Planning as You Age
After coming up with a financial plan for your emergency and luxury savings, it’s time to think long-term. This includes planning for retirement. Maximizing your long-term financial success means sorting through tax rules, financial products, options, and asset combinations. In short, it’s complex. Financial planners help take the stress out of the equation. They can interpret the laws and rules to help you understand all of your options.
Estate planning is another important step. It allows you to decide what happens to your money and estate if the worst should happen. Your financial advisor and estate attorney will work together to distribute your assets as instructed after your departure. This saves your family the challenges associated with probate court and disagreements.
Long-term care is something else you should plan for down the road. Financial advisors have experience related to planning for either in-home medical care, extensive hospital stays, or even rehabilitation. All of these expenses can burn through retirement funds and your estate very quickly. Having a plan helps soften the blow for you and your family’s financial well-being.
The last thing anyone wants is to work hard their entire life and then have an illness or accident wipe out their savings. Thankfully, we can plan for these things so the burden is less should these situations occur.
When it’s time to retire, there are multiple retirement strategies. A financial planner experienced in retirement planning can help you understand which investments require minimum yearly withdrawals or if there’s an account that is best used first. They’ll offer you options so you can understand how to make the best financial decisions when it comes to retirement funds and social security.
2. Pursue Investment Goals
As you get older your income and assets tend to increase. It’s also not uncommon for your goals to change. What once may have been a simple retirement plan may now include college tuition for your children or grandchildren. Experienced financial advisors can view your goals independently to determine what’s realistic and the best path to pursue your goals.
A skilled financial advisor understands that there’s more than one path to get from A to B. They also understand how to shift what you have to fit your new goals as your life changes and evolves.
3. Balance Assets
Financial planners can also help you balance your assets. They’ll help you determine your risk tolerance and explain how that influences your investment options. Higher risk tends to mean higher reward. However, there’s also the potential for loss. This is why it’s important to have a balanced portfolio with several investment types including mutual funds, bonds, and cash equivalents.
Your advisor can review your financial situation and risk tolerance to make investment recommendations. As you near retirement, they’ll help you make the changes to protect your investments and all the money you saved for retirement.
4. Professional and Objective Assessment
New opportunities for investment come up frequently. Sometimes it can be hard to resist an investment that sounds really great, but under the surface may not be what you imagined. Your financial advisor will help you determine if an investment opportunity is right for your financial situation.
Experienced financial advisors also understand the ups and downs of the stock market. They can offer you advice on when to stay the course and when to invest more or less. Their goal is to keep your portfolio balanced and help you walk away better off than you started.
5. Tax Planning
Financial advisors can also help you with your tax planning. This usually involves using tax-deferred accounts to allow you to benefit from incentives and pay less income tax. Financial advisors know that some investments may actually result in you paying more taxes than you otherwise would have. They always consider your tax position when they make a recommendation.
6. Keep on Track
Skilled financial planners can help answer your difficult questions. For example, if you’ve lost time contributing to your retirement because you started late or had a period of unemployment, they can advise on how and when you should try to catch up on your contributions.
When things spiral out of control due to elections, global pandemics, or other reasons, they can keep an eye on your investments and help you pivot as needed to protect what you have and find a new path toward your goals.
The past few years have made certified financial planners more important than ever. It’s easy to panic in uncertain times but understanding market fluctuations and the media’s role in volatility can help clients through trying times.
7. Financial Confidence
Investing is complex. Markets fluctuate. While it’s easy to predict some of these ups and downs, other times it’s not. It’s important to remember that professional financial advisors do what they do for a living. Every day they’re analyzing investments, assessing risk, and looking for opportunities. They know how to provide their clients with financial confidence when it comes to their investments and financial future.
8. Protection Against Information Overload
The internet is a great source of information. However, it can be quite overwhelming as well. While everyone has the ability to search for information, knowing how to interpret that information into useful decision making is something else, especially considering all the conflicting information out there.
Experienced financial advisors can interpret the information and explain things to you in an easy-to-understand way. They can help you see through the hype to the information that matters.
9. Expert Understanding
Each and every financial advisor develops certain expertise in the industry. Some may know more about your state’s pension plan and Social Security while others may have a deeper understanding of estate planning. Talk to your potential financial advisor about their specialties and how they can use their unique knowledge and experience to guide you toward your goals.
10. Lack of Bias
Everyone has biases. Sometimes, it’s difficult to understand our own bias and how to counteract it. If you’re against certain types of investing, you may actually be hurting yourself. Some people want to avoid the stock market or real estate and focus on safer investments. However, in doing so they may be missing out on significant wealth growth. Impartial advisors can offer advice and counter any biases you may not have even realized you had.
When to Meet with a Financial Advisor
It’s a good idea to first meet with a financial advisor at various points in your life. You’ll want to meet with them a minimum of twice a year to review your portfolio and discuss any changes you’re thinking of making. There are certain life milestones where you’ll want to meet with a financial advisor to make sure you’re on the right track financially. These milestones include:
- Becoming self-employed
- Starting a Family
- Coming into Money or Inheritance
- Facing Specific Financial Planning Needs
- Nearing Retirement
It’s important to understand that while these are important milestones to meet with an advisor, this doesn’t mean these are the only reasons. Some people meet with a financial advisor if they’re having problems with debt and want to look into debt consolidation. Others may be looking to start a business or have life-changing circumstances such as adoption, divorce, or caring for an elderly parent.
We’ve helped our clients through all stages of life. Even if you don’t realize that something may affect your financial future, there’s a good chance it will, at least to some degree. Having a chat with your financial planner about any changes in your finances is a great way to keep your goals in sight.
Many people feel that meeting with a financial advisor is intimidating, and they don’t know what to ask. Thankfully, skilled financial planners understand what most people are looking for when it comes to financial goals. They can ask questions you may not have thought of to help you discover where you want to be in the future.
Once you have an idea of your goals, they’ll go over your current financial situation with you including all your existing bank accounts, retirement accounts, if you have children, want to pay off your mortgage, retirement, and so much more. The two of you will work together to develop a plan to work toward these goals.
Having a financial planner isn’t about the money you have now or your age. It’s about getting you to where you want to be financially for the future you want for yourself and your family.
When you need an experienced financial advisor, the team at Virtus Wealth Management is here to serve you. Our team has years of financial wisdom in many different areas. Our areas of concentration include retirement planning, wealth management, risk management, and more. If you’re wanting to evaluate your plan to save for retirement, get into or change your approach to the stock market, or if you just need overall investment advice, we’re here to answer your questions.
Call us today at 817-717-3812 to learn more about how our services and how we can help you find a great financial advisor.