How can a Financial Advisor lead you to a successful portfolio?
Here’s how you reach your long-term financial goals
Financial goals vary from individual to individual. Every individual has varied returns expectations given their risk appetite and though a lot of research is available on the internet there is no apt DIY to help you achieve your goal. Patience, sound knowledge of the subject, and a lot of experience is required to master financial planning. Here is where Financial advisors come in.
There is a systematic process that is followed by experts to understand your goals, objectives and basis, that we form specific strategies to help you achieve your financial goal. Here is how a transparent and knowledgeable advisor helps you and why guided investment is important.
Understanding the Financial Questionnaire:
Advisor, to understand your financial objectives, resources you hold and details about your financial situation, works with you on a financial questionnaire. It gives a complete picture of your assets, liabilities, income and your expenses. This questionnaire also projects your immediate financial needs, your retirement needs, describes your long-term obligations and also takes into consideration your various other financial requirements. It helps advisors during asset allocation for you. A wrong assumption or calculation in any one of them may lead to deferment of your goal. Therefore it is advised that you take help from an expert.
Once you and your advisors reach the same page on understanding your present financial position and future projections, you are ready to work together on a plan to meet your life and financial goals.
Creating the Financial plan:
A rational and realistic approach is the key to creating a financial plan that would guide you through your journey. An expert synthesises all the information into a comprehensive financial plan that will serve as a roadmap through your financial journey. An Investment Policy Statement summarizes the key findings from the questionnaire and meetings with your advisor. It recaps your goals and objectives as discussed with the advisors. This is a crucial document and needs to be made carefully. In this statement, funds will be researched to fit your objectives while keeping in mind externalities or unforeseen events. This document drills down various topics related to your financial situation and plans to meet your listed objectives. After your review of the plan with your advisor and adjustments, if any are made, you are ready for the next step, the Action plan.
Executing the Action Plan:
Financial advisors help you with every aspect of your financial life and not just investments. Majorly, advisors help you with your investments decisions by managing your portfolio or recommending investments but that may not be all.
The advisor will simply set up an asset allocation plan for you considering your risk tolerance and risk capacity. It will contain all steps that an advisor recommends to reach your goal. They act in the purview of laws and compliances that are required under the buying and selling of such financial assets. A Knowledgeable and Transparent Advisor will help you not only to preserve your wealth but grow it!
Regular Financial Modelling:
To navigate through the tides of financial markets active monitoring is a must! Once you approve the action plan and transactions start taking place in your portfolio, advisors will send you reports of your accounts which will include statements from the advisor on updating your portfolio. Regular meetings and calls are scheduled to have your portfolio updated according to changes in your goals and objectives and also to brief you on your portfolio growth. Updating your folio according to your current situation is very important
A financial advisor will help you reach your long-term goal in the following ways:
Expertise: Financial experts have more knowledge and experience about investments and financial advisory and therefore are better than most of us. They will assist you to make better financial choices than you might take on your own.
Accountability: Taking financial decisions about your own money gets difficult at times as it is expected to be swayed by emotional factors. A financial advisor helps you by talking out such emotional factors and keep your portfolio on right track by buying a stock that’s been skyrocketing or selling all your stock funds when the market plummets
Advice: It’s in the name! Financial advisors guide you about the best strategies to implement to improve your finances, from what investments to make to what insurance to buy, every financial decision.
Evolution: Anything that is constant is change. As your life circumstances change, a financial advisor helps you adjust your financial plan so that it always fits your current situation and addresses your financial future.
Action: Many people don’t take the steps they should manage their finances because they’re too busy or too uncertain about what to do. Working with a financial advisor means an expert will handle what you don’t have time for and make sure your money is being deployed in the best way.
