Importance Of A Financial Advisor

 

Creating a financial plan is not everyone’s cup of tea. Sometimes you may not have the time; sometimes you may not have the required skill set and most often, you may not have the inclination to undertake such an exercise. So, how can you go about acquiring a suitable plan? Simple; delegate the job to an expert!

At present times, the financial markets are flooded with a variety of financial instruments with varied characteristics and maturity periods. Previously you had to be content with bank fixed deposits and investments in gold, real estate, insurance products and equities. But at present times, you also have the choice of mutual funds, ULIPs, insurance products with riders, gold ETFs and SIPs. Even though these instruments are easily available, it is difficult to choose appropriate instruments and construct a portfolio which matches and meets your unique needs.

Enter financial advisor

Keeping this in mind, you need the services of a professional financial advisor who is qualified to suggest investments in suitable financial instruments. Financial advisors construct your financial portfolio by considering your income, age and other parameters. Moreover, they also give you valuable advice on how to revisit your portfolio when there is a change in market conditions, your income levels or responsibilities. They help you invest the spare/excess cash available with you in a productive manner so as to reduce your tax liability and maximize gains. The advice given by a financial advisor also helps you to negotiate salary components with your employer which will indirectly help in reducing your tax burden. In case you are earning in foreign exchange, the services of financial advisors will help you deploy those funds into the most suitable investment avenues.

Lastly, the services of professional financial advisors become imperative because one size does not fit all; your income levels, expenditure and tax liabilities are likely to be different from those of your friends and acquaintances.As a result, what has worked for them may not work for you as well.

Conclusion

While choosing a financial advisor, be sure to go by good references and not the lowest price tag. Then, once you have chosen a financial advisor and are convinced that his or her advice is based on scientific principles and sound experience, you must trust his or her advice. Most importantly, remember that for your financial planning exercise to be successful, even if it constructed with the help of the best financial advisor, you must have patience and perseverance. Some financial goals take relatively long to materialize.