If you know how important it is to invest for your future but unsure of the road to follow, you may want to get some guidance and direction from a financial professional. But if you’ve never worked with one before, what can you expect?
Here are some things to look for:
• Assessment – A financial adviser will assess your current financial situation – assets, income, debts and so on – but that’s just the start. These days, advisers recognize the need to view their clients’ lives holistically.
Consequently, you will see questions like this: What are your feelings about investing? How would you judge your risk tolerance? What are your individual financial goals? What hopes and dreams do you have for your family?
• Recommendations – Only after fully understanding your needs, goals and preferences will a financial adviser recommend any investment moves. There are no “one-size-fits-all” solutions.
You may want to steer clear of individuals claiming to be financial advisers who “guarantee” big returns with no risk. In the investment world, there are few guarantees, and every investment carries some type of risk.
• Communications – Financial professionals communicate with their clients in different ways, but you should always feel free to reach out to an adviser with any questions or concerns. Most financial advisers will want to meet with clients at least once a year, either in person or through an online platform, to review their investment portfolios.
During the review, the financial adviser will help you determine if any changes are needed. But financial advisers won’t wait a full year to contact clients to discuss a particular investment move that might need to be made.
Also, depending on the firm you choose, you should be able to go online to review your portfolio at your convenience.
• Technology – A financial adviser can employ a variety of software programs to help clients. For example, a financial adviser can determine the rate of return you might need to attain specific goals, helping shape your investment strategy.
But there are also a lot of “what ifs” in anyone’s life, so an adviser can use hypothetical illustrations to show you where you might end up if you take different paths, such as retiring earlier (or later) than you had planned or putting in more (or less) money toward a specific goal, such as education for your children. Anyone’s plans can change, so the ability to view different potential scenarios can prove valuable.
Above all, a financial adviser can help you feel more confident as you pursue your goals. Among investors who work with a financial adviser, 84% said that doing so gave them a greater sense of comfort about their finances during the COVID-19 pandemic, according to a survey conducted in 2020 by Age Wave and Edward Jones. And during times of market turbulence, such as we’ve experienced this year, a financial adviser can help you avoid overreacting to downturns.
When unexpected events crop up, such as a lapse in employment, a financial adviser can suggest moves that may enable you to avoid major disruptions to your financial strategy. Conversely, when a new opportunity emerges, perhaps from an inheritance or some other windfall, your financial adviser can help you take advantage of it.
Navigating the investment landscape can be challenging – but the journey can be a lot smoother if you’ve got the right guide.