Are you unable to control your financial situation diligently? Often late with payments? Are you struggling to save for retirement? These are common problems that people run into when their finances increase. Sometimes they have received a promotion at work or might have even inherited some money from a loved one who has passed. That is where an advisor or planner comes into play. It can be a great benefit to hire a financial planner or advisor, but what is the difference between these two, and how can they benefit you. Today we are discussing more on this subject.
What Is a Financial Planner?
A financial planner is a qualified person who can help you with a variety of different financial services. They give the client advice on investments, retirement, tax, inheritance, estate planning, and portfolio management. Depending on your needs, you need to look at a financial planner specializing within your chosen category. They help you meet your current financial and long-term goals.
What Is a Financial Advisor?
Pittsburgh financial advisors advise you on your financial situation and help to create investment strategies to increase long-term wealth and decrease financial risk. The financial qualification they have depends on which area of expertise they can be of assistance. A financial advisor can sometimes pose as a planner, but you should be sure to check if they have their CFP (Certified Financial Planner) certificate. A financial advisor can also assist you with a forecast of your assets, investments, and retirement withdrawal plan.
Do You Need Financial Advice or Planning?
Finding the right financial advisor can be a savior for people who are struggling to get a grasp on their financial situation. You might be on the wealthier side and need someone to help plan your saving for your retirement or are wondering how much money you need to invest with a financial advisor. That's where a financial advisor or planner can come in and assist in creating a saving strategy for your future. If you face tax implications or complications in your tax bracket, they resolve any issues and alleviate tax impact on your portfolio.
What Does It Cost to Hire a Financial Advisor?
Cost depends greatly on what services you are after and also determined by each advisor. The price can range anywhere from a few hundred dollars per hour to a monthly fee. You can also arrange a per plan fee that could cost anywhere between $1000 to $3000. This way, you can tailor the service to your financial needs. Annual retainer fees for a wealthier client are perfect for someone that wants to full package. If they need taxes, investments, asset management, and retirement planning, working on a long-term yearly basis with your financial planner are recommend.
The Value of a Financial Advisor
Besides getting your financial situation in order, an excellent financial advisor can increase your monetary gains. By having someone look after your portfolio, you can save yourself a lot of time learning about all the categories involved in the industry. You know the saying; you get what you pay for? Well, this is evidently true when it comes to financial advice. The value of a financial advisor or planner is often greatly dismissed, as people do not want to spend the extra money on securing their future.
Why Not Learn by Googling?
Well, there is a lot of information out there regarding financial advice and services. All of this data can lead to an information overload and ultimately confuse you more than anything else. If you don't have extreme discipline and patience to invest in learning. You may not see any financial progress for a long time. That is where a financial advisor who is qualified has studied for years. Ever heard of the saying, ‘time is money?’ Well, that is exactly what a financial advisor is going to save for you. Precious time so that you can spend it with the ones who matter most.
What are the Advantages of a Financial Advisor/Planner?
Protect Your Wealth for Your Family
Protecting your wealth is vital when you have a family that might need support in the event of death or injury.
There is a bunch of different insurance policies that you can look at when protecting your family. A financial advisor helps you to choose the right policy that will suit your financial situation. This way, you avoid any confusion that might come when picking the right one for you and your family.
They Deal with Your Certified Public Accountant or Your Attorney
They take the stress out of dealing with your accountant and attorney when matters arise. Things can get complicated when unexpected times occur or if you are now expecting a tax increase because of your new salary.
In essence, they save you a lot of time and money when dealing with various tax and legal aspects. They also keep you and your money safe from liabilities.
Help Create a Retirement Plan
As you get older, you need to look out for what is best for you. The statistic shows that about 35% to 40% of Americans have nothing saved for retirement. It is an alarming number revealing most people are not ready for retirement. A financial planner helps create a retirement saving strategy that benefits your monetary situation. Whatever your plans for the future are, meeting a qualified financial planner might be the best thing you do.
Keep an Eye on Investments
For example, you have some investments on the S&P500. You can have your financial advisor keep an eye on it. In the case of an event that causes the market to turn against your investment. It is always best to have someone watching. Markets are volatile, and often the media can make it seem like the risk to reward ratio is higher than it is. The right financial advisor will eliminate the noise and keep you on track with your investment strategy.
Buying A House
Although a financial advisor cannot sell you a house, they can advise you on retaining cash on your mortgage repayment. The mortgage market is tough to get into and has multiple requirements for lenders.
A financial advisor can guide you through the steps to fulfill each requirement before deciding to make your purchase. Buying a house is probably one of the most expensive things that most people ever do. So, it is imperative to get the correct advice when deciding which home loan to choose.
Finding The Right Combination of Investment for You
The right combination of investments allows you to tolerate risk better. Putting all your eggs in one basket is never a good idea, so diversifying your portfolio helps keep your investments balanced.
Your financial advisor should find out more about your risk tolerance. Then suggest assets that best suit you. Avoid silly FOMO positions in the market with a financial advisor keeping you on track.
Advice to Business Owners
As a business owner, your financial requirements are different. You put your business first instead of focusing on investments. That way, growing your business exponentially and setting yourself up for financial freedom in the future.
A financial planner or advisor can help apply for a business loan for you if you require it. They can manage incoming funds that might come with implications, such as a TAX increase. They might shift around your funds into various assets to avoid as much TAX as possible.
The Cons of a Financial Advisor
Finding The Right One for You
It can be challenging to find the person that genuinely has your financial interests at heart. You need to research and find out what works best for you. Then find the advisor or planner that is well-known for that category.
Conflict of Interest
Finding someone who is pressured to sell products by their company is something that you do not want.
You want a trustworthy person that treats their relationships with clients as it was their funds. Always look for a fiducial financial advisor or planner that is well-known. You can thank yourself in the long run.
Fees and Hidden Fees
Smaller account holders might find that fees are high for their balances, and a financial advisor might be out of budget. You do not want your costs to take up most of your investment, so be cautious about who you invest with first. Always read the fine print.
Hidden fees often pop up and are in clauses of contracts or policies that you may sign. If your advisor is truthful and honest, he should mention this to you. The problem is that most are more interested in their financial gain. So, be aware of hidden fees before signing any new policy.
Financial Peace of Mind
Finally, a financial planner and advisor give you the peace of mind you need when handling your funds. Finding and working with the right person is not only going to see you grow financially but also help keep your future finances in check. These people can be wonderful assets when used correctly, and can put you on a path to financial success.