Expert advice can be the key to making strong financial decisions.
If you’d like to have your investments working harder for you, ask yourself if you’d be making better decisions if you were getting professional advice. For many people, the answer is yes.
That’s because the difference between getting advice and doing without it is often the difference between moving toward your goals and being stuck where you are.
Financial advice isn’t something you save for emergencies. And it’s not an admission of ignorance. Rather, advice works best when it’s ongoing and goal-oriented, helping you to increase your confidence and your investing skills as you develop a financial strategy and put it into action.
What financial advisor can do?
If you work with a financial advisor, what should you expect to gain?
- Help in defining your goals
- Help with understanding and managing risk
- Explanations of investment opportunities and common mistakes
- A structured, individualized strategy for investing
- Advice on specific investments
- Help with evaluating how well your investments are meeting your goals
- A system for recordkeeping
Finding the right advice
When you’re ready to choose an advisor, you should look for one who’ll help you move toward your goals. To make the search easier, it helps if you’ve thought about the kind of advice you’re looking for and the things you want to accomplish. And remember, the choice is yours: Clients pick advisors, not the other way around.
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Always ask potential advisors to explain specifically how investments and financial planning strategies they recommend may help you accomplish your goals. The more direct the answer, the better you’ll feel about following the advice and developing a working relationship with that advisor. Look for advisors and financial organizations that stress your investment and financial planning concerns. Be alert to advisors who may promote investments or strategies that you don’t understand and which they can’t — or won’t — explain clearly.
If you use the guidelines for choosing an advisor that are suggested in the following pages — with their emphasis on asking direct questions and checking references — you should be able to find a qualified advisor interested in building a long-lasting relationship that’s centered on your goals. If you have specific planning needs — as a business owner, for example — seek an advisor with relevant experience. Professional associations may be a good source of leads.
When to get advice
There’s no right time for starting to work with a financial advisor — like your 35th birthday or the day you find the first gray hair. It’s one of those situations when it’s never too soon — or too late.
But there are occasions that might encourage you to talk to an advisor, either because things are going well or because they’re not:
|When times are good||When they’re not so good|
|The balance in your savings accounts is more than six months’ salary||You’re afraid of losing your job, or don’t expect a salary increase|
|You just received a big raise or a large bonus||You’re facing the likelihood of divorce, and you’re not sure where you stand financially|
|You inherited some stocks and bonds, but you don’t know whether to hold onto them or sell them||You don’t have a savings account or a money market fund|
|You have several large CDs that are about to mature, and the new interest rate is low||You know you’ll need money for certain expenses — like education — but don’t know how you can manage it|
|Your investments are doing well||Your investments have lost value, and you’re concerned about future losses|
Sharing advisor with spouse
Whether you share an advisor with your spouse or companion or choose your own is a matter of personal choice, just as your other financial decisions are. Some couples, for example, keep separate accounts and divide household bills. Others pool their money in a joint account. Both ways work.
Sharing an advisor might make it easier for both of you to balance your portfolios and simplify tax planning. On the other hand, if you’re used to making separate financial decisions, or if you feel that your partner’s advisor is not interested in your concerns or your questions, finding your own advisor might be the right thing to do.
Your age, the length of your relationship, and other factors can also influence whether it’s important to get separate advice. But remember that you’re likely to be managing all the investments alone at some point. You won’t want to face that responsibility without financial advice from an advisor you know and trust.
When Should You Start Looking For A Financial Advisor? by Inna Rosputnia
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