Money is so simple conceptually, but so complicated in reality. Everyone understands exactly how it works. You perform a service or sell some sort of product and you are compensated with money you can then turn around and use to purchase the services or products you require. It’s black and white, right? While the concept is plain enough for anyone to grasp, the market economy is by no means as easy. How to navigate the world of credit, how to organize your finances, how to grow your savings and how to make your money work for you are all strategies people grapple with during the course of their lives, sometimes successfully, but often with disappointing results. That’s why financial advisors exist. Their job is to look at your goals and help you realize them. But how do you know if you need a financial advisor?
The first thing you must look at is if you can afford one. Financial advisors earn that title by graduating with an advanced degree and logging many years on the job. But their job isn’t done after they hang that diploma on the wall. Financial advisors must stay current on changes in the market, what strategies are proving successful, and which investment tools are no longer attractive. It’s a constant juggling act of research and client hours. With this sort of work load you can expect a quality financial advisor to demand a significant salary. You will be just one of his many clients, and pay an hourly fee for his time. So if you don’t have a significant portfolio and money to spare each month you can’t go down this road.
Speaking of portfolios, is investing something you are interested in? If you want to be involved in the market in any way you cannot go into it blind. Some people prefer to manage their investments themselves, and are willing to spend the time to learn how to do that effectively. Others would rather hand it over to a professional. A financial advisor at a reputable organization such as The Kelley Financial Group can help you lock down the proper fund manager, or can make recommendations for investments simple enough to manage on your own. Regardless, it’s a good idea to have a couple of meetings with an advisor before you get too far along with an investment strategy.
Are you considering a significant purchase or investment change? One great use for a financial advisor is to receive advice on a single project. This is a good idea if you’re considering buying a home or refinancing your current mortgage and want to better understand all of the possible financial ramifications. It’s also a strong option if you’re thinking of investing in a company or the development of a product, or considering selling your share of a company. Business owners who have received a buy-out offer or are facing legal issues will often bring in a financial advisor before making any final decision.
Another great time to employ a financial advisor is when you are devising your retirement strategy. You’ve spent the past several decades maintaining the status quo, and now you want to know if there’s anything more you should be doing. Perhaps you’re looking at the investments you have in place, but you have no idea what the early termination fees, SMSF benefits or estate tax ramifications actually translate to in real life. Regardless of your age or financial position, talking to a financial advisor when doing your retirement planning is always a great idea.
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