Why Should You Hire a Financial Adviser?
Many people have
this common question;‘Why should I pay somebody to manage my finances?’ This
is of course quite justified until you understand how beneficial financial advisers can be.
Based on 15
years of research, analysis and testing, Vanguard, one of world’s largest
investment companies concluded that when you work with a financial adviser,
there is a quantifiable increase in returns. A separate study by Russell Investments,
a large money management firm, estimated an increase of returns by 3.75 per
cent when a good financial adviser is hired.
These studies are
proof of how beneficial a financial
adviser could be. Before we go on to explain in detail the main benefits
of hiring a financial adviser, let us first understand what or who a financial adviser or a financial
planner is.
A financial
adviser is an individual who has expert knowledge and appropriate
qualifications that can offer valuable industry insight and expertise above
that of a laymen or general consumer. An insurance adviser is usually consulted when you are seeking specialised guidance or
advice for investment in various insurance schemes. Whether you
require a financial adviser or not depends completely upon your financial
goals, the complexity of your financial matters, your knowledge of the
financial market and your current financial situation.
Warren Buffett
once said that to invest successfully, one must have a sound intellectual
framework for making investment decisions and the ability to prevent emotions
from disintegrating that framework.
Simply put; hiring
financial solutions providers
can help you to achieve your financial goals.
So, let us now look
at the actual benefits of hiring financial solutions providers.
1. Expert
skills and knowledge means less risk
The complex legislation and the
dynamic environment of the finance industry with a growing number of wealth
creation and investment options has made financial planning even more
intricate. Trading or investing in this uncharted territory alone potentially
exposes you to high-risk whereas a well trained and skilled finance
professional will understands these risks and will walk you through the pros
and cons, offering every opportunity to improve your financial position while
reducing your risk.
2. Personalized Plans
A single generic financial plan
cannot suit every individual’s need. A good financial planner will help provide
a customised financial strategy to suit your specific financial situation and
should work with you to customise your own financial plan and success goals.
3. Documentation of the Goal
The duties of a good financial adviser should
not end at helping you to choose the right investment. They should also help
you to discover, document and update your current financial goals on an ongoing
basis. These written goals are a constant reminder for both you and your
adviser of what needs to be achieved.
4. Unbiased Decisions
When investing, it is essential that the
balance of emotional connections between the investor and the investment have a
buffer of experience. A good financial adviser should understand your emotional
connections however they should offer impartial advice. A financial planner is
free from these emotions and impulses and can help you make fact-based choices.
While most Australians seek financial
independents, only a small percentage actually achieve it.
Improve your investment choices - be smart,
invest smart and get advice from experienced professionals.
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