If you’d like to have more time to focus on other things in your life, and you want to entrust your finances to someone more experienced, enlisting the help of a professional financial advisor could be a great option.
The decision to hand the reins over to a financial advisor or planner is a big step for most DYI investors and one that comes after a lot of research and shopping around. But how do you know if you need a financial advisor in the first place? The answer to this question will often depend on a variety of factors including:
- The amount of money you have to play with: Most people who come into a large sum of money choose to get a financial advisor since more is at stake. On the other hand, if you have less than $500.00 to invest, a financial planner may not be very effective since it is likely that a good chunk of the principal amount will be eaten up by fees.
- Whether you are at the cusp of retirement – this is a critical period to get you money in order and any wrong financial decisions at this time could mean working another decade into your retirement. Most people are not willing to gamble their retirement livelihood and will happily hand the reigns over to an advisor who will help with retirement planning.
- Your level of expertise and interest in investments – If you have little to no knowledge of investing, then a financial advisor may be the perfect way to get some guidance and help you get on track.
- Time and interest - You need to have plenty of spare time on your hands to personally monitor stocks and adjust a portfolio. If you have no time (or interest) for this, then perhaps a financial advisor is the best option for you.
If you finally decide that a financial advisor may the best option for your situation, then it is important to shop around for a registered and licenced financial planner. When deciding on the best financial advisor for you, consider asking the advisor some of the following important questions:
- Are you associated with any organisations or companies – or are you free to invest in any company?
- What are your fees and charges?
- What are your commissions for financial products?
- Do you have license? (you should also conduct your own checks by looking online.)
The decision to hand the reins over to a financial advisor or planner is a big step for most DYI investors and one that comes after a lot of research and shopping around. But how do you know if you need a financial advisor in the first place? The answer to this question will often depend on a variety of factors including:
- The amount of money you have to play with: Most people who come into a large sum of money choose to get a financial advisor since more is at stake. On the other hand, if you have less than $500.00 to invest, a financial planner may not be very effective since it is likely that a good chunk of the principal amount will be eaten up by fees.
- Whether you are at the cusp of retirement – this is a critical period to get you money in order and any wrong financial decisions at this time could mean working another decade into your retirement. Most people are not willing to gamble their retirement livelihood and will happily hand the reigns over to an advisor who will help with retirement planning.
- Your level of expertise and interest in investments – If you have little to no knowledge of investing, then a financial advisor may be the perfect way to get some guidance and help you get on track.
- Time and interest - You need to have plenty of spare time on your hands to personally monitor stocks and adjust a portfolio. If you have no time (or interest) for this, then perhaps a financial advisor is the best option for you.
If you finally decide that a financial advisor may the best option for your situation, then it is important to shop around for a registered and licenced financial planner. When deciding on the best financial advisor for you, consider asking the advisor some of the following important questions:
- Are you associated with any organisations or companies – or are you free to invest in any company?
- What are your fees and charges?
- What are your commissions for financial products?
- Do you have license? (you should also conduct your own checks by looking online.)
Sarah Paige has a passion for managed funds. By her own admission, she loves playing with her own managed account, perhaps a little too much.
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