For all these years, it was believed that a financial advisor is vital only for large businesses or conglomerates, or at the most for individuals with lots of wealth. For the common folk, the term financial advisor was more in the nature of ‘friend’s advice’. Generally, the money management part was handled as a family affair where everybody, from spouse to parents to the neighbors, took active roles. But ever since the advent of the knowledge age, things are changing drastically. People these days understand the importance of a financial advisor. Following are some of the points which will throw some light on the importance of a financial advisor.
1. Professional is after all a professional!
Will you go to a barber for a hair-cut if you know how to do it? Of course you will! You must realize that if you want to get your job done in a proper manner then hiring a professional ensures the right result. Then why make handling your finances an exception? It’s the job of a financial advisor to provide you tailor-made solutions to your requirements and give you the right insights. Even if you are a regular CNBC watcher, even if you are a regular surfer of investment websites, you cannot imagine even in your wildest dreams to match the expertise of a professional. So remember, this is the time you need to keep your ‘ego’ aside and approach a professional. However, remember to check out for registered and certified professionals only.
2. Asset allocation and evaluation
As we all know, at least theoretically, that one must not put all the eggs in one basket. But one must also remember that, out of desperation to choose multiple baskets, one must not end up picking up baskets which are torn or broken. Your eggs will break anyways. A Financial advisor helps you to find those ‘baskets’ to park your money. This process is called as asset allocation. Moreover, it’s not enough to allocate your assets. Continuous monitoring is also very much essential. Asset allocation is a very dynamic field and is not a onetime affair. One cannot constantly monitor one’s investments all the time. This makes the job of a financial advisor all the more critical.
3. Goal Planners
You may be having several financial goals in the years to come. Although we have our goals, we seldom plan our activities considering those goals in our mind. This attitude makes our goals nothing more than ‘castles in the air’. A financial advisor helps to make those castles real. He conducts a detailed study of your sources of income and suggests you different investment plans so that your goals are achieved in an hassle-free manner.
4. Speculative purposes
Some people are truly dare devils. They are not considered with all the data which analyses the age from which they will be requiring to stop working. All they want to do is take more risks now! We can blame such people. Moreover, many of these people end up amassing huge money within a short period. Risk is not bad, and if it is a calculated one, then there is a huge potential in such risk to meet your lofty goals. Such people can contact a professional financial advisor so that they can systematically understand what the exact intention behind every move is. Those who are interested to play with the derivative instruments, which are highly risky, then they definitely need a financial advisor.
5. Specialized requirements
There are specialized financial advisors too. Some are specialized in insurance. Some are specialized in handling the high net-worth clients. Some are specialized in geographical markets, like the U.S market specialist or an Asian market specialist. Hence, before approaching a financial advisor, one must be absolutely sure of one’s own requirements.
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