You may have heard of financial advisors and even thought of hiring one, but do you actually know what they do? Financial advisors do more than execute trades on your behalf. Below, we take a closer look at what these professionals do and how they can help you:
Roles of a Financial Advisor
Think of a financial advisor as a personal financial planning partner. They take into consideration multiple aspects of your financial goals, formulate a plan, review it regularly, and keep you on track to achieving your financial dreams. Essentially, they are skilled professionals with the required training and the right licenses to help you map out your financial future.
When you hire a financial advisor, they will usually ask for and review your financial record. You and your advisor will also discuss and agree on topics, such as:
· The type of insurance covers you need.
· The types of accounts you should open
· How much money you should be saving.
· Your tax plans.
· Your estate planning.
Besides this, your financial advisor will also educate you on the steps you must take to reach your financial goals. The most common topics you will discuss include tax planning, insurance, and complex investments. This usually begins with understanding your financial status and answering questions about your future plans. Additionally, your advisor will check in with you from time to time to discuss financial changes and how they affect your overall plan.
Simply put, financial advisors are professionals responsible for creating personalized financial plants to help you – their client – achieve your financial goals. They can also execute trades on your behalf on the market, using their expertise to ensure your financial interests are protected at all times. The financial plan a financial advisor devises for you will usually include tax strategies, insurance, budget, and savings. Once completed, your advisor will check in with you from time to time and update your goals.