What Do Financial Advisors Really Do?

by on June 20, 2012

It is important to manage your money wisely; you want to be putting away for retirement, saving for your kids to go to college, while simultaneously making sure that you pay your taxes and insurance and all the other bills you accumulate. This is often too much for the average person to keep track of, so many turn to the skills of a financial advisor. Some people, however, feel that the assistance they would receive is not worth the money one would have to spend on the financial advisor. However, you will be shocked that the long-term income you will make and save from having a financial advisor, outweighs the cost of one. If your family can afford financial advising, there are many reasons that it would be well worth the money.

While financial advisors look at your overall financial situation and make a plan that fits your individual needs, there is much more to it than that. Their goal is to get you from where you are to where you want to be financially and that can’t be done with a simple glance at your records. They will sit down with you, discuss your goals, and tell you exactly what you need to do to accomplish them along with providing shortcuts you may have overseen. If you have a specific time frame that you need or want to adhere to (for example, your kids are in middle school and plan on going to college, or you want to retire in fifteen years), they will take that into account. In creating your plan and organizing your money, financial advisors use stocks, bonds, mutual funds, real estate investments, insurance products and other various financial opportunities to construct the perfect financial plan. Financial advisors sift through the different types of investments and programs and give you the best options available that fit your situation.

Even if you can manage your money on your own, a financial advisor is valuable for many reasons. First of all, they are able to look at the ‘big picture’ of your finances, while you may be focused on short-term goals. Likewise, they will still get you to meet your short-term goals at the same time as saving for the future. As they are not emotionally attached to your money, they can make tough decisions without guilt and see the outcome more clearly. People will often have conflicting priorities, such as trying to send kids to college while also building a retirement fund. A financial advisor will tell you unemotionally and professionally where to send your resources so you can be building funds at a steady and reasonable rate. Because financial advisors are experts of managing and establishing different accounts they can also save you money on taxes. Financial advisors know how to arrange your investments to minimize the amount of taxes you are paying because they understand the different types of investments and the rules and tax guidelines for each. This is good because not only are you saving money on taxes but you are simultaneously keeping more of your money invested in accounts where it can, not just potentially, but because you have a financial aid advisor, will definitely grow.

Most importantly, financial advisors diminish the amount of stress you feel when managing your own money. When you have an expert managing your finances, you can relax and instead focus on simply making money. As financial problems are one of the biggest factors in familial and marital unhappiness, in the long run, hiring a financial advisor is well worth it regardless of the current financial position you are in.

{ 4 comments… read them below or add one }

Suzanne June 22, 2012 at 3:44 pm

Chris, for me the value in having a financial advisor is that they can help me manage my money in an objective way. I look at money from my own viewpoint. My advisor looks at it from the angle of the financial goals we have created together. And my advisor helps me stay grounded and not overspend. That’s is worth so much to me.


Lee August 5, 2012 at 1:31 pm

Enjoyed reading your site.
I am afraid I am one of these people who look deeply into what financial advisors try to sell you now. There has been so much bad advise and miss selling going on. This has made me a skeptic I’m afraid so come on people get my trust back.

Thanks again lee
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Nia May 8, 2013 at 4:58 am

very good article to read really it is very difficult to find the loyal financial advisor.
who is really trustworthy and with whom we can share our financial details.


Thomas June 14, 2013 at 4:58 am

Having a financial advisor would mean that you don’t invest emotionally, and invest with the right knowledge. However, there is a lot of negativity around having a personal financial consultant. As I see it, the business of finance is founded on trust – the advisor will work in your best interest. However, with shady advisors in the trade, it’s obvious for people to be skeptical about engaging an advisor.
Thomas recently posted..What is a Gold IRA?My Profile


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