Unless you are a part of the 35% of Americans who said they worked with a financial advisor in 2022, it is possible that you may have overlooked the value of a financial advisor or perhaps felt like you didn't need one in the first place.¹ It is common for people to think of financial advisors as only for the ultra-wealthy, but that simply isn't the case. A financial advisor can be beneficial to anyone at any point in time during their life.
While you may have been getting by with "do-it-yourself" financial strategies, it can be confusing and challenging to know if your actions are actually working. However, when you work with a financial advisor, you have a professional who can confirm whether or not the strategies you're employing are beneficial for your goals and plans—and you can make genuine progress toward them. The true value of working with a financial professional is the peace of mind you receive at night knowing that you are taking the appropriate financial steps for you to be okay later in life. We call this peace “financial confidence”.
Financial confidence is only one of the many benefits of working with a financial advisor, and you can uncover even more when you work with a professional who can tailor strategies specific to your financial situation. To begin your search, though, let's take a look at some of the ways you can benefit from working with a financial advisor:
Professional Guidance
As trained professionals, financial advisors deeply understand various investment strategies, financial products, and tax laws. As a result, they can provide unbiased and personalized advice to help you make informed decisions about your money.
Goal Setting and Planning
A financial advisor can also help you set and prioritize financial goals, such as saving for retirement or buying a home. In addition, they can develop a comprehensive financial plan that considers your current situation and future aspirations.
Saving Time and Reducing Stress
Working with a financial advisor can save you both time and stress by handling all the complexities of managing finances, which allows you to focus on other areas of your life.
Help with Many Financial Topics
Investment Management
To begin with specific financial topics, a financial advisor can help you create a diversified investment portfolio that aligns with your risk tolerance, time horizon, and financial goals. They can also monitor and adjust your portfolio to ensure it stays on track. Asset allocation is also an important responsibility, which refers to determining how much of your or your family's portfolio should be invested in different asset classes, such as stocks, bonds, and cash.
Tax Planning
When it comes to taxes, financial advisors can provide guidance on tax-efficient investing and help you understand the tax implications of your financial decisions to minimize your tax liability. Advisors have a good knowledge bank of tax-efficient investing strategies, such as utilizing tax-advantaged investment accounts like 401(k)s, IRAs, and Roth accounts. You may also experience assistance with understanding the tax implications of different income sources, such as capital gains, dividends, and interest income.
Estate Planning
Financial advisors can assist with your estate planning by helping you create a plan to transfer your assets to the beneficiaries after you pass away. Advisors can provide guidance on creating a will or trust and help clients understand the tax implications of different estate planning vehicles, such as gifting, charitable giving, and life insurance, which can be used to transfer assets to beneficiaries in a tax-efficient manner. When a loved one passes away, a financial advisor can help the family take the difficult financial steps needed and allow the impacted loved ones to focus on grieving.
Retirement Planning
Do you want the retirement of your dreams but don't know how to obtain it? Well, a financial advisor can help you create a comprehensive plan that takes into account your current financial situation, retirement goals, and risk tolerance. This process generally includes your current savings and investments, projecting future income and expenses, and identifying any potential gaps that need to be filled to achieve your desired lifestyle in retirement. On top of this, all of the previous topics we mentioned play an essential role in the retirement planning process, so your financial advisor should be well-equipped to provide strategies that focus on the entire picture.
Education Planning
Last on this list, but certainly not least, financial advisors can assist with education planning by helping you create a plan to pay for the future, or current, costs of higher education. A financial advisor can help you understand and navigate the various types of financial aid and student loan options available, such as scholarships, grants, and federal student loans, as well as private student loans—all while being aware of each option's tax implications. Additionally, advisors can provide guidance on budgeting and cash flow management to help you manage the costs of education over time.
In conclusion, working with a financial advisor can provide a wide range of benefits to help a variety of people achieve their financial goals. We understand you work hard for your money and paying for financial advice might not seem like a necessity, but an advisor can help make what you earn work harder for you. Many companies have attempted to calculate a quantifiable value for today’s financial advisor – ranging between 3% according to The Vanguard Group, Inc.² to 4.91% according to Russell Investments³ – both in 2022 reports. However, value is significant but unique to each investor and unquantifiable.
Holistic financial planning is not the same as investment management so if you are looking for someone to be on your side, offering financial clarity and confidence, then we look forward to serving you. Whether you’re a recent graduate, near retirement, or somewhere in between, working with an excellent financial advisor can do nothing but help.
