Part 3 of 3 – Do You Need a GREAT Financial Adviser?
After reading my recent blogs “What makes a GREAT financial adviser?” and “The benefits of working with a GREAT financial adviser“, do you still think you can manage your investments and financial planning without help? Do you now believe that you need a great financial adviser? There are certainly plenty of tools available online to help you do just that. However, even with the rise of online investing, there’s still no substitute for competent advice from a trusted professional.
You can find plenty of financial planning advice online. There’s no shortage of articles and websites out there dedicated to topics like personal investing, retirement planning, and saving for university.
I believe there’s one problem with all of that online advice, though. It’s not specific to your situation. When you work with a financial adviser, you get advice and planning tips that are customised for your unique goals, risks, and concerns. An adviser only offers specific solutions after carefully considering how those solutions will affect your specific financial situation.
This is an important distinction as there’s no financial solution that’s right for everyone. Each person has his or her own risk profile. A financial solution that has worked out well for one person may be too conservative for another. An investment that’s recommended by your friend or colleague may actually be too risky for you. I for one strongly believe we all need a great financial adviser.
Of course, the only way to find these kinds of answers is to work with an experienced and knowledgeable financial adviser, who can help you determine how much risk is appropriate for you and how to best reach your goals.
Here are four more reasons why I believe you need a great financial adviser:
An adviser can help you determine the right allocation for you.
Many people think that the most important aspect in investing is to find the right investments. They look for a “hot fund” or a good bargain. While those kinds of investments can pay off sometimes, it’s almost always more important to have a solid long-term allocation that’s appropriately diversified across a range of different asset classes.
Diversification reduces volatility in your portfolio and reduces the risk that you’ll suffer a serious, permanent loss. It can sometimes be tough, though, to know how much risk to take on. What’s the right amount of equities? How much should you have in volatile asset classes? How much of your portfolio should be in relatively “safe” assets?
A great financial adviser can help you answer these questions. They can ask you questions to better understand your goals and your tolerance for risk. They can then build a recommended allocation that maximises your return potential while also limiting the amount of risk that you’re exposed to.
An adviser can keep you from making rash decisions.
It’s easy to make fast, emotional decisions when it comes to money. That’s especially true during down markets and other financial crises. You may be tempted to sell everything, abandon your plan and get out of the market altogether.
However, even the worst financial problems are often very short-term issues. If the equity markets have shown us anything over the past 100 years, it’s that they are remarkably resilient. Selling to avoid short-term losses can often prevent you from participating in a larger, long-term recovery.
A financial adviser can help you avoid these kinds of rash decisions and can act as a sounding board so you can discuss your concerns and fears. They can talk through your options with you and help you reach a decision that satisfies your short-term concerns but also doesn’t undermine your long-term plan.
An adviser can help you develop a plan.
One of the most critical elements in reaching your financial goals is having a well-defined plan in place. A written financial plan is a document that outlines your goals, identifies the challenges in reaching those goals, and sets out action steps for overcoming those obstacles. It’s the road-map to your financial dreams.
A financial adviser will have a process in place for developing a custom financial plan for you. That plan will tell you exactly what steps you need to take to reach your goals. The adviser can then offer solutions and investments to help you accomplish those goals.
An adviser will motivate you to take action…
…and not put off important financial decisions for another day. The adviser will help you to alter your mindset and strongly-held beliefs that can often deter you from making potentially life-changing decisions. A good adviser will do everything possible to ensure you reach and often exceed your financial objectives.
A plan isn’t set in stone. As your life changes, you’ll need to revisit your plan regularly. What made sense for you in your 30s may no longer make sense in your 40s. Your allocation will need to be adjusted as you get closer to retirement. Your adviser will be there to discuss these changes with you and incorporate them into your plan accordingly.
If you still have queries with regards to if you need a great financial adviser or not, please get in touch, and I will personally assist and clarify any queries.
About Mike Coady
Mike Coady is an expat expert based in Dubai and is on hand to help with all of the above and more.
Mike is an award-winning money coach and industry leader in the financial sector.
Qualified to UK Financial Conduct Authority (FCA) standards, a member of the Chartered Insurance Institute, a Fellow of the Institute of Sales Management (FISM), a Fellow of the Institute of Directors (FIoD), and featured as a highly qualified Financial Adviser in Which Financial Adviser.
To learn how to choose a great financial adviser, download our free guide.
Blog published by Mike Coady.