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May 12th, 2015

Financial advisor brings investment into focus


The question of whether or not to obtain professional financial advice may be lingering on the minds of many persons who have had to deal with the reality of a fixed salary, rising expenses and wading through the maze of savings and investment options available. Since proper and consistent financial planning is the key to dealing effectively with these realities, how can the services of a Financial Advisor help you?

What is Financial Planning?

Let’s begin by taking a look at what we mean by financial planning. It’s really about a process of meeting your life goals through proper management of your finances. And those life goals might include buying a new car, home, marriage and college education for the children. You may also have to deal with a major medical issue for yourself or a family member. The financial planning process consists of six steps which will help you to work out where you are right now and what is needed in the future to help achieve your goals. 

The Key Role of an Advisor: Define your goals

The first step is to establish a relationship with a Financial Advisor and agree on how you will work together to achieve your life goals. The Financial Advisor should clearly explain the services to be provided and define both his and your responsibilities. Secondly, discuss your personal and financial goals with your Advisor and understand that they will most likely change over time. You and your Advisor should mutually define the goals, understand the time frame for results and discuss your risk appetite. Next, let your Advisor evaluate your current financial situation to determine what you must do to achieve the goals you’ve identified. Depending on what services you request, this could include analysing assets, liabilities and cash flow, current insurance coverage, investments or tax strategies. Once a clear picture emerges of what is needed, your Advisor will document it and provide recommendations for your consideration.  Ensure that you are comfortable with the options presented.

Evaluation Phase: Cater for Life’s changes

Now that a practical approach to your planning is established, look carefully at the implementation. You should both agree on how the recommendations will be carried you’re your Advisor may carry out the recommendations or serve as “coach,” coordinating the whole process with you and other professionals such as attorneys or stockbrokers. And finally, monitor the recommendations with a periodic review of your situation to make adjustments.  This final step is very important, as it will keep your financial plan current and will cater for the life changes when they occur.

Professional advice: Wealthier

For some persons this planning process may seem quite complicated, but once you seek the services of a knowledgeable Financial Advisor you’d soon discover that there is no mystery but significant benefits to be derived. In fact, you’d be taking a very important step towards achieving your financial goals. A study conducted in Canada by the Financial Planning Standards Council in June 2010 revealed that Canadians who rely on professional advice to guide their financial decisions are wealthier, more confident and better prepared for the financial implications of marriage, a new child, financing their children’s education, retirement and other life events than those who do not have the benefit of advice. The study also demonstrated that households with Financial Advisors have substantially higher investment assets than non-advised households, in each income range and age group.

Rest assured, with your Advisor’s assistance your current financial position will be reviewed to develop a personalised plan recommending the most appropriate savings and investment vehicles, to maximise interest income and capital appreciation while reducing taxes so you keep more of the money you earn. Together you will be able to identify other suitable financial solutions such as insurance to help ensure that what you value most in life is protected against unforeseen events like property damage due to natural disaster or medical care for critical illness.

While our experiences in life are somewhat different and each individual is unique, we share similar life events. Many of these events trigger the need for financial advice and though we may share similar experiences, our paths toward achieving individual goals and objectives could vary dramatically. These are some of the financial planning realities your Advisor will be able to bring sharply into focus.

But despite the most careful planning, our lives change, and our financial plans may need to evolve. Your Advisor will help to revise your plan to reflect significant events, including career changes, to keep your strategy on track. You can explore a wide range of financial goals throughout your lifetime – from how to fund your dream vacation, manage your mortgage or finance your child’s education. Think about the limited time in the midst of a 40-hour work week to dedicate to managing your finances and consider the peace of mind gained from having a well-developed financial plan with the assistance of a trusted Advisor. Why not rely on the knowledge and experience of a Financial Advisor to help make the decisions that will work best for you?