Financial Advisors and How to Choose One (Part 1)

Inheritance, Legal

Our friends over at have written an awesome guide to what financial advisors do, and certain steps you should follow when choosing one. Let’s begin by sharing what financial advisors are and what they can do for us.

A Financial Advisor is a qualified professional who can help you to manage your money. This person will provide you with advice and guidance on investments, insurance, tax-related matters, and even on taking a loan for, say, buying a house or paying for your child’s college education. But a financial advisor’s role does not stop there.

A good advisor will also help you with emotional or behavioural management. What does that mean? If you have a large amount invested in stocks and the market crashes, your immediate reaction may be to sell your holdings before your losses increase. However, that could be the wrong approach to follow. You will receive input on the investment strategy that you should adopt from your financial advisor. Your advisor will guide you through the market cycles and make recommendations that will hopefully lead to building your wealth over the long-term.

Here are some of the areas where you can expect to receive guidance from your financial advisor.

A Financial Advisor is a qualified professional who can help you to manage your money.

Asset Allocation

Are your investments in sync with your goals and your risk tolerance? Your advisor will seek information from you about the level of risk that you are willing to take. You will also need to tell your advisor about your investment horizon. When will you need the money that you are putting away? You will receive guidance on the most appropriate asset mix for your portfolio based on the answers that you provide to these questions. This will help you to decide on the amounts that you should deploy in stocks, bonds, real estate, and commodities.

Long-term Financial Plan

One way to measure the success of your investment strategy is to monitor the returns that your portfolio is making every quarter or every year. But are these gains taking you any closer to meeting your long-term financial goals? The advice that you receive from your financial advisor will help you to implement a plan that does this. You will also get input on how to make mid-course corrections based on changes in the market situation.

A Budget for Your Future Need

What can you reasonably expect the value of your portfolio to be by the time that you are ready to retire? Are you planning on a family and your children’s education? Based on these projections and needs, you can calculate the monthly sum that will be available to you when that time comes. A good financial advisor will not only help you with these issues, you will also receive guidance on the questions that you should be asking. Another key role that an advisor plays is to act as a sounding board for your investment ideas. Of course, you will also receive recommendations about the most suitable ways to deploy your funds.

We hope this gives you a good idea of what financial advisors do! Join us soon as we share more on the following:

The key factors to consider when choosing a financial advisor.
The step-by-step process you should follow when choosing a financial advisor.

As always, feel free to reach out to us if you have any questions at all.

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Last updated on

May 2nd 2019, 8:43 am

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