Let’s make one thing clear before we get started. Not everyone is going to need a personal financial advisor. The purpose of this article is to explain what a financial advisor can do for you and leave it for you to decide if it is worth hiring one or not.

You do not have to be rich to benefit from a personal financial advisor. A lot of people have no financial plan because the thought of creating one just scares them to death. But it is really important that you have a financial plan. You need to know where you are going with your money and your life. It is really good for your overall well being.

Before you even think about hiring a personal financial advisor you need to be clear about your current financial position. An advisor will ask you a number of questions. If you don’t know where you are financially you will not be able to answer the questions with any conviction.

You should also have a good idea about what you want going forward as well. If you already have financial goals that is great. If you don’t then it is time to sit down and think about them and commit them to paper. Once you have these two things buttoned down look at the benefits of using a financial advisor below to see if you need one.

What does a Personal Financial Advisor do?

Before we get into that we would always recommend that you choose an independent personal financial advisor that has RIA (Independent Registered Investment Advisor) status. If you choose an advisor that works for a large company then they will want to force their company’s plans on you. This will not always be in your best interest.

Your advisor will provide you with personalized financial advice totally tailored to you and your situation. Everybody is going to have different financial goals and requirements. Sometimes you need a higher level of expertise and experience to help you make the right decisions.

A Personal Financial Advisor provides Customized Advice and Guidance

Different people have different financial goals. You may want to advice about investments, estate planning, taxation or the management of your assets for example. A personal financial advisor will provide you with guidance that is specific to you.

A financial advisor can also help you review your financial goals and your financial plan. They are likely to know a lot more about the financial industry than you do. Your advisor can use their experience to help you to refine your goals so that you can achieve them more easily.

They will provide Personal Accountability

Any good personal financial advisor will want you to succeed with your financial goals. Independent advisors are far more likely to be personally accountable to you for your financial future. In order to do this they will want to have a deep understanding of where you are now and where you want to be in the future.

It is important that you trust a financial advisor and they know this is important too. So they will go out of their way to develop a strong relationship with you. This could involve a number of different interactions. So you will probably have to meet with your advisor on more than one occasion.

A good Personal Financial Advisor will have a Transparent Fee Structure

A lot of independent financial advisors will charge fees based on the assets they are managing for you. It is usual to agree a percentage with you right at the start so that you know where you are.

You want to ensure that your personal financial advisor has the right incentives to work hard for you. Negotiate an agreement where they receive a percentage of the gains that they are able to make for you. In this way your success is their success.

A Financial Expert to help you with all of your requirements

Even if you have only accumulated a small amount of wealth it is always good to have an expert to call upon so that you make the right decisions. Yes you can go online and formulate a financial strategy. But nothing beats sitting opposite an expert who has the right knowledge and experience.

Be aware that some personal financial advisors specialize in certain areas. There are some that are expert in investments. Others focus on complex taxation issues, retirement planning, estate planning, the selling of a business, trust formations and so on.

A Personal Financial Advisor can Manage your Portfolio

If you are planning to have an investment portfolio to meet your financial goals then you need to be aware that these can take a lot of time to set up and manage. Portfolios need monitoring regularly to ensure that they are performing as well as you want them to.

Some personal financial advisors will manage your portfolio on your behalf which will free up valuable time for you to do something else. There will be no need for you to rebalance your portfolio accounts on a regular basis. Your financial advisor will take care of this for you.

So do you need a Personal Financial Advisor?

Now that you know what a personal financial advisor can do for you it should be easier for you to determine if you need one or not. Even if you don’t need one right now you may well do in the future.

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I need a lona for about 1000

Nora Borosak

Hi Bonnie,

Please take a look at our “Banking & Loans” section for more information. Thanks for reading!