What Does a Financial Advisor Do?

Oct 12, 2023 By Susan Kelly

A financial advisor is a broad term that includes many professionals, such as financial planners, investment managers, estate planners, and many others. Financial advisors are professionals who will help you design and implement a budgeting plan for your future that may be geared to a specific financial goal or maybe more extensive. Alongside giving you advice, certain financial advisors can be able to take on the full administration of your investment portfolio.

If your first meeting with a financial professional, they should be asking questions to gain an understanding of what your financial situation is like and what your financial goals are. They'll create a strategy to help you meet the objectives. It is important to include information about your liabilities and assets, including savings balances, goals and objectives, debt balances and insurance policies, and many more. If you opt for a financial planner, your strategy will become more thorough and offer you steps to take that touch all aspects of your financial situation. Other advisors might choose to focus on one or more specific areas like the planning of your retirement, estate fiscal planning, or debt management.

When Should You Consider Hiring a Financial Advisor?

  • You're saving money for retirement, but you don't know what you should set aside each month.
  • You've recently been married and are looking for help on how to control your finances as two people.
  • You've recently been divorced or widowed and need assistance determining how you can manage your finances as a single individual.
  • You've recently had your child and would like to know more about saving for education and life insurance, or just general financial management to become a new parent.
  • You've recently received a huge windfall like an inheritance or winnings from a lottery you're not exactly how to maximize the value of your inheritance.
  • You're approaching retirement, and you'd like to ensure that you're in the right place.
  • You're contemplating putting together an estate plan or trust to ensure your loved family members are taken care of when you pass away.
  • Parents are growing old and need help with their finances.
  • You're not confident enough to invest independently, and you'd prefer an expert to take over the responsibility.
  • You've decided to control your finances but need an expert's opinion on your progress and suggestions about improving your performance.

If you're considering engaging a financial adviser, it is important to research several experts and ask them questions to determine an advisor you can count on. It is important to note that some financial advisors might require you to possess several assets before working with them. This could instantly rule out some.

How to Choose a Financial Advisor

Getting One-Time Financial Advice

Certain advisers or financial planners assist savers on a limited basis in developing an investment plan or assisting with a specific problem or issue. The majority of these sessions are priced on an hourly basis or at a flat rate. If, for instance, your employer has offered you the option of buying out your company to retire early, you may want to engage the assistance of a financial adviser to help you evaluate the choices. They can assist you in assessing any incentives your business might offer, like enhanced pension benefits, and help you consider the long-term costs or advantages of making such an option.

For a different example, you could seek a financial advisor to create a complete financial plan or analyze your current financial situation. Apart from providing a better understanding of your financial situation, you will likely leave with concrete steps or a roadmap to follow. Be aware that one-time consultations are not uncommon to develop into an ongoing advisory relationship or more frequent financial audits.

Hiring a Full-Time Financial Advisor

There are plenty of excellent reasons to utilize the assistance of a financial adviser for the occasion of a short-term or one-time need. Still, it also makes sense to utilize the assistance from an adviser on a more long-term basis. Different firms and advisors operate differently; however, it is typical to have an advisor within one of these agreements to offer continuous investment management services and ongoing guidance on issues with financial planning that investors may face. These can be related to planning for estates and taxes as well as retirement planning savings for your children's college and various other aspects.

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