The Need For A Financial Advisor

Financial advisors are needed to assess the financial needs of individuals and help them with investments (such as stocks and bonds), tax planning and insurance decisions. They help clients plan for short term and long term financial goals spanning everything from birth to retirement. They conduct financial planning & recommend investments to match the clients’ goals and build wealth.

The need for hiring a financial advisor arises in different situations for different people. Few people have a good grasp of saving and managing their spending but have no clue what they should do next. It is a known fact that money not invested is money lost to inflation. In these situations, a financial advisor can step in and help create a roadmap that looks at long-term goals. Frequent checks by a financial advisor will ensure you don’t stray from your plan.

A large chunk of well-paid professionals is unable to manage their money. Paperwork and time are the major challenges that face such segment of people. They need a financial advisor at this juncture, but before they engage someone they need to be clear about their mandate and the terms on which money is to be managed. Having over 10000 Mutual Funds & 500 stocks to invest into, complicates the matter further. However, the primary value addition of an advisor is more with financial planning, asset allocation rather than only cherry picking investments.

The role of a financial advisor is to collect details of expenses, savings, and investments. Once the information is obtained a portfolio consolidation and review is done. The advisor tabulates all the gathered information and plugs in all the required details. Then having estimated the current value of the investment portfolio and brought all the details together, the person in need of an advisor should sit with the advisor to decide how the portfolios will be managed going forward. Maintaining a close, transparent relationship with the adviser is highly important to one’s financial health.

Financial advice typically costs .5% to 1% of the portfolio per annum. Not everyone needs a financial advisor. About one-quarter of people are self-directed and truly enjoy investing following the market and doing the financial projection, but three-quarter of us aren’t self-directed when it comes to money. It’s good to know that there is help available which can really pay off in the right circumstances. The charges, however, must not hurt your investments significantly. We, at savart, believe that everybody deserves quality, affordable financial & investment advice irrespective of their amount of investment.

Actually, it is more likely an event that spooks a person and sends him scurrying through an advisor’s door. When you reach a point when you are constantly afraid that you are going to make a mistake with your investments, then you need a professional advice.

Financial advisors come handy to retired people who have to take critical decisions to make their investments as there is a need to make their money last. On the other hand, youngsters can seek professional help to help insulate themselves from the effects of living over-the-top lifestyles and poor saving discipline. Alarmingly, savart’s survey with numerous youngsters has shown that options like chit funds are favorite destinations to park money and most of them have no idea about inflation and equity investments. This calls for more serious advice and education.

The need for a financial advisor arises when you do not have time to monitor, evaluate and make periodic changes in the portfolios. If you are truly bad with numbers or financial discipline or have a very complex financial situation an expert advice might be advisable. There are certain money or tax management topics that can benefit from an expert advice, like the timing of social security, sequencing, and taxation of retirement withdrawal etc.

There are several ways in which a financial advisor can add value to our investment efforts. The benefits we get on hiring a financial advisor to name a few are guidance on overall investment strategy, asset-allocation, minimizing taxes, rebalancing and how to structure/time withdrawals from retirements amounts.

Each of these services can incrementally boost a client’s return-sometimes steadily, sometimes sporadically.

The best financial advisors are able to keep their client’s fears and emotions in check by providing steady, fact-based advice and reassurance when the markets get crazy.

Savart is India’s largest Investment Advisor based on number of unique portfolios under advisory.