Most people have a desire to seek financial independence and security, but many never really follow a plan to achieve it. For some people, building a portfolio is too complex and confusing and they shy away from ever taking any concrete steps to wealth creation. Others may feel they can manage their own investment strategy by themselves, but will often end up making fundamental mistakes in either taking on too much risk, or missing opportunities to grow their wealth.
Using a financial planner can be a good way to remedy these issues and build a more effective financial plan with a minimum of fuss.
But how exactly can a financial planner make a difference? Well here are five reasons that may help you decide whether it is the right thing for you.
Using a financial planner can be a good way to remedy these issues and build a more effective financial plan with a minimum of fuss. But how exactly can a financial planner make a difference? Well here are five reasons that may help you decide whether it is the right thing for you.
1. Objective input into your plan
The defining feature of all good financial planners is that they never offer a solution until they fully understand the goals, desires and priorities of the person they are helping. It is only by making a thorough analysis of a person’s situation and objectives that this understanding can be achieved. Once the individual’s needs are identified a range of financial options are recommended to best meet them.
This level of professional scrutiny ensures you are receiving objective advice and are not simply a one-size-fits-all solution. Expect your planner to conduct a needs analysis so that recommendations can be made to suit your particular goals.
2. Knowing what works and what doesn’t
Financial planners are used to dealing with people in many different situations and at different stages of financial development. They have witnessed mistakes that people have made when they have tried to “go it alone” or have been haphazard in their approach to building financial security.
They have also seen the fruits of success when they have helped clients build effective wealth creation strategies. This invaluable experience can be applied to help you avoid the pitfalls and capitalise on the opportunities using tried and tested methods.
Financial planners are experienced in dealing with people in many different situations and at different stages of their financial development
3. Qualifications enable holistic advice
Gone are the days when financial planning was offered by someone who was tied to a single investment provider and was operating with limited training. Financial planners now need to meet stringent professional standards with well-defined levels of qualification and must undertake ongoing education. This means their advice is well-informed, just like any other professional adviser, such as an accountant or solicitor.
Financial planners may also be a member of the Financial Planning Association, which means they must achieve and maintain levels of excellence in conduct and qualifications.
4. Comprehensive research resources
A key advantage that a financial planner can offer is the benefit of exhaustive research to back their recommendations. They have well-established links with dedicated research specialists who are tasked with continuous monitoring of the latest market and product developments. This market intelligence is then used to inform the recommendations they make to clients.
The planner will also have access to research from investment houses and fund managers to further enhance the advice they give. This level of highly sophisticated research is simply not available or accessible to the general public and is a critical component in underpinning the quality of advice you receive.
5. Continuous review and refinement
The economic environment is in constant flux, markets go through cycles and stages and new investment products are continually being developed. This level of change means a financial plan needs an ongoing review in order to keep it relevant and operating efficiently. At the same time, your individual needs and priorities will inevitably change as you experience changes in areas of your life like employment, income, health and family circumstances.
A good financial planner will set out a system of review so that all of these changes are monitored and your plan is adjusted to retain its effectiveness.
A long-term relationship
Enlisting the help of a financial planner is not simply a one-off event for a quick fix. It is a relationship which can last a lifetime to help build your wealth, protect you in times of unexpected misfortune and eventually help you to enjoy a comfortable retirement lifestyle.
Have you benefited from professional financial advice? Share your experiences below.