“A good financial planner is going to do more than pick your funds” – Dave Ramsey
Have you ever thought about why there are coaches to guide you in sports? Or teachers to guide you through your initial school years? Why do we need guidance? We need guidance to excel in our life, follow our goals, and learn from our experiences.
Just like this, when it comes to financial matters, financial planners become our coaches here! They decide on the main goal you need to achieve & accordingly strategize a plan for you to follow and succeed. They monitor your progress to avoid any obstacles in your journey to achieving your financial goals.
Who is a financial advisor?
Financial advisors or say, financial planners, regardless of your situation, create a financial roadmap and can make sense of your finances. These financial advisors navigate specific financial goals like buying a house or paying for a child’s education, tax planning, and retirement planning. When looking for a financial advisor, check whether or not they are efficient or trustworthy as mentioned below:
- Professional Qualities like their experience, competence, and capability to decode the requirements of clients
- Personal Qualities like whether he is honest, patient, integrity, willing to help, farsightedness, etc.
Sachin Tendulkar is one of the greatest batsmen yet he needed a coach to excel in his career. India has climbed up the Badminton ranks after Gopichand set the world-class academy at Hyderabad, giving birth to Saina Nehwal, P.V.Sindhu, Kadambi Srikanth, Parupalli Kashyap, etc.
The coach is not limited to just providing technical expertise in the game. The right coach works on overall fitness – stamina & endurance; Nutrition; Goal and planning.
He decides on the main goal that the player needs to achieve and then plans the progress in a graded manner gradually pushing the players to achieve more and not become an overnight success to avoid injury (Monitoring). The right coaching requires –
• Domain Specialist Coach
• Physical Fitness Instructor
• Nutritionist
• Psychological Coach (Mental Strengthening Coaching)
Personal Finance World
Financial planning and creating a well-diversified portfolio is important for financial independence. Financial planning is not just chasing and investing in the highest returning product. Investment is also about
• Deciding what you are saving for (goals)
• Working out a realistic plan of how you can achieve them most efficiently.
• Choosing what’s the best-suited investment product for your short-term, medium-term & long-term goals.
• Assessing if you have adequate risk protection enabling you to overcome any unpleasant scenarios?
Financial planning involves you to assume the role of a
• Financial Planner
• Investment Advisor
• Insurance Counsellor
• Tax Planning & Tax Filing
However, when it comes to financial savviness or financial literacy, the picture is grim. In a survey conducted by Standard & Poor in 2014, 76% of Indian adults lacked basic financial knowledge. With such limited knowledge of financial matters, how well do you think you can plan your finances? This is where a personal financial advisor comes into the picture.
A personal financial advisor is a financial expert who can help you create an ideal portfolio depending on your financial needs. Engaging the services of an advisor is beneficial for the following reasons –
Expertise
Financial advisors have the necessary qualifications and expertise to guide you financially. They are experts in their fields and know- –
- The effect of tax on your income and how to minimize it
- The investment avenues available and which would suit your requirements.
- The latest changes happening in the financial markets.
- Industry Insights
Equipped with this knowledge they are uniquely placed to offer you guidance and advice on how to invest, how much to invest, and for how long to invest. They can also guide how to use your investments and redeem them to book maximum gains. You might not have this expertise and this is why choosing a financial advisor to handle your finances is recommended.
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Holistic approach to finances
A financial advisor can help you plan a complete financial roadmap – right from your financial goals and the tools to achieve them. Starting from budgeting your income and expenses to setting aside funds for investments, picking investment tools, and tax planning, financial advisors can chalk out a complete financial plan for you.
Moreover, with your changing financial needs, a personal financial advisor tweaks your financial plan so that it evolves with your needs. They, thus, have a holistic approach to finances and encompass all your financial needs and resources to devise a well-drafted financial plan that, if followed, would lead you to financial wellness.
Time-saving
Imagine planning your finances yourself when you have limited knowledge! It would take days of research and planning and then too you might be unsure of the effectiveness of your plan. Instead, if you switch to a professional financial advisor, you can save precious time and effort in handling your finances.
You can dedicate your time to the tasks you excel in and leave the finances to the advisor who has mastery on the subject. This would not only make you productive but also ensure that you have the right financial portfolio per your needs.
Also Read: How To Plan Your Finances In New Year 2024?
Why Do You Need a Financial Advisor? Now More Than Ever!
Experience In Financial Planning
Most of us are like Anurag, who thinks we are experts in financial planning. However, the right investments to gain wealth require expertise. We may get confused, greedy, or even pessimist during the market’s ups and downs resulting in wrong decisions. Experienced Financial Advisors can help us understand trends, and stop us from investment decisions that we may regret in the future. They provide better investment choices to help us achieve our financial goals.
Assistance In Future Planning
We tend to always look for solutions when the problem arises. Unpredictable financial setbacks can be avoided if we plan. Major life changes like college, marriage, purchase of a house or car, or even retirement need proper planning.
A Financial Advisor helps you in planning and makes you realize the importance of savings and investment. Alerts Regarding Avoidable Investments Falling prey to random investment planning usually leads to bad decisions. It’s never too late to realize that we know very little about the market and financial opportunities that will benefit us.
A Financial Advisor can stop you from avertable investments and save you from losing your hard-earned money. Guides To Achieve Short-Term and Long-Term Goals.
A Financial Advisor helps you map out your investments in short-term and long-term goals. With a pre-defined timeframe and milestones, you can achieve your financial goals more easily. They help you align your tenor with important changes in your life like college, marriage, family planning, etc.
A Financial Advisor can ensure that your long-term investments reap good results. This in turn will make you immune to financial crunches like right now. According to Finance experts like Fincart, Covid-19 has been a wake-up call for most of us to manage our finances well and avoid financial setbacks. Experienced Financial Advisors are the need of the hour now more than ever who can help us prepare for future emergencies.
Conclusion
If you have time, you have the right knowledge of all the above then by all means please do manage your money yourself. Nobody will ever care about your money the way you do. However, if you lack any one of them (either TIME or KNOWLEDGE) then do not experiment with your hard-earned money. Choose financial advisors. Personal financial advisors are financial doctors who can diagnose your financial problems and then take steps to rectify them. Just like you trust doctors for your physiological health you should trust financial advisors for your financial health. However, if you hire a Financial Coach then ensure that your coach has all the skill set or the institution has all the skill set available to take care of your hard-earned money.
