Introduction
When you are a newbie investor, it is natural that you feel overwhelmed with too many options.
You might have real estate shares, high-paying securities, fixed-income securities, mutual funds, exchange-traded funds or ETFs, currencies, structured notes, and other investment bonds to choose from.
Therefore, you might need guidance or hand-holding support to help you navigate the complexities of starting your journey in the field of investing.
On this parlance, let us explore the 10 Top Reasons As To Why You Must Work With An Investment Advisor.
Helping you get started here:
Top 10 Reasons as to why you must work with an investment advisor- Insights explained
Get the right kind of investment advice
An investment advisor or a financial planner is primarily involved in analyzing the risk tolerance ratio of every single investor. This is a profiling ratio that helps determine how much market risk you can take under your belt for the amount of money you would want to invest under different financial or investment options.
While this is being carried out, the investment advisor further advises you on what investment options can you ideally invest in. And, he would also brief you on the pros and cons of investing via every financial instrument.
Therefore, to get the right kind of investment advice, you need to bank upon the services of an experienced investment advisor or work with a financial advisor indeed.
To give a layer of protection for you and your family
When you sit with your investment advisor or a financial advisor, you would get vital inputs on how you can build diversified types of investment or wealth-generation baskets that comprise an optimal mix of financial instruments.
You can add bonds, high-paying equities, real estate products, and govt-backed insurance options. This way, when if one particular financial option does not perform well in the market owing to volatile market conditions you might have few other products doing well in the market.
This way, your investment portfolio continues to grow at a steady pace to safeguard you and your family from unforeseen financial emergencies or contingencies.
In a nutshell, a financial advisor can help you get cues on how to get started and help you navigate through the decision making process in a smoother manner.
To help you create an even balance between saving and spending
When you are on the earning spree of your career, you know as a matter of fact that you will get your salary cheques or pay cheques month on month. And, most private and govt companies employ people between the age group of 21 and 65.
And what happens to your pay cheques post you cross 65 years of age? You would not have the regular sources of income that you were earning from Fortune 500 or FMCG companies. So, how would you manage to have a corpus that can help you through the rainy days that are ahead of you?
This is where you need to have a financial or investment advisor sit by your side and help you with the right kind of financial advice as you how you can balance your earnings between saving and spending. This way, you do not splurge too much leaving you with nothing to cope with for the rainy days that are ahead of you.
To help you plan for your retirement
When you cross 65 years of age, not only would your earnings stop but your expenses might also rise due to unexpected turn of events that you might contemplate with.
Here, you may have to gear up what you have under your savings account for medical emergencies or constant visits to nursing homes or daycare centers. Your comorbidities increase as you grow with age. You might develop blood pressure, diabetes, arthritis, osteoporosis, and other age-related health disorders.
Therefore, you might need to build a corpus retirement plan that helps you save enough to help you cope with your retirement. And, it is the investment advisor who would help you build a starting point with respect to the same.
To help you secure your house
Your homes might need refurbishments from time to time. As a homeowner, you would have a fair idea as to how much it costs to revamp the interiors of your homes. Or, repaint your homes from time to time. The ceiling walls crack during rainy days and you may have to replace rooftops or ceiling walls bearing the costs to their entirety.
Therefore, you can seek advice from an investment advisor to look for a home insurance policy or a home refurbishment insurance policy that covers your expenses you may have to avail of home-related expenses.
This way, you can get most of your home expenses covered and need not break through your bank vault to get your home repairs or maintenance done.
Likewise, you can also build a comprehensive solutions that gears you to taking the right kind of financial decisions at the right time. You must trust your advisor to the fullest and inform the other kind of debts you have been maintaining across other financial partners. This way, the advisor can offer investment advice and help you reap the maximum value out of it.
To help you meet your investment goals
You can use the experience, guidance and the intellect of a well-experienced investment advisor in ways more than one. You must seek customized or well-planned investing solutions that clearly align with the financial goals you have in mind.
You might want to plan an early retirement. Or, you would want to pay up your son’s or daughter’s tuition fees a term earlier.
Here, you seek the services of a wealth manager or an investment advisor to chart out your financial goals into:
- Short-term plans
- Medium-term plans and
- Long-term plans
You can build investment portfolios that perfectly align with the financial goals or aspirations you have in mind. Choosing time horizon based investment options calls for wide degree of knowledge and expertise in the field of finances or investments which you can expect from an experienced and a competent investment advisor.
Building a robust strategy or planning for a wise life insurance package can keep you on a better stead when you plan for your retirement years that are ahead of you!
Portfolio Allocation
An investment advisor or a portfolio manager helps you build an optimal portfolio of investments in a well-diversified manner. To build an income generating or wealth earning portfolio, you must be able to choose the right kind of investment bonds, currencies, equities, fixed-income securities, real estate bonds and structured notes.
An investment advisor helps you balance the high-paying market instruments against the mediocre investment options. This way, your wealth portfolio can garner better rates of returns over investing in mutual funds or a standardized investment scheme wherein your options of earning remain static or limited.
Therefore, an investment advisor or a wealth advisor helps you choose the right kind of assets that take you to reaching your financial goals closer.
Helps you with rebalancing your portfolios from time to time
An investment advisor can be a wealth manager, investment banker or a financial planner. The designations of the personnel might vary a little. But the scope of operations more or less remains the same.
Here, the main consideration for a financial planner or an investment advisor is to steer the financial interests of their investor clients in a streamlined and systematic manner indeed.
Therefore, to do so, the investment advisor rebalances the portfolios of his client investor. The process involves reviewing how the investment options are doing inside the market place.
There would be certain types of bonds or stocks that might perform well despite market volatility. These are retained inside the investor’s wealth basket. The not-so going well investments or shares are typically removed from the basket.
When this happens, your investment portfolios grow on a profitable note and does not suffer unforeseen losses or lead to any kind of financial-based capital erosion for investor clients on the whole.
Offer customized investment solutions
An investment advisor sits one-on-one with his investor clients and profiles what kind of risk tolerance the client can take in. This way, he analyzes the pros and cons of the investor’s risk handling vis-a-vis capital availability requirements.
Therefore, an investment advisor can come up with lucrative forms of customized or tailormade investment solutions to every independent investor client he deals with.
An investment advisor can offer customized solutions with respect to:
- Portfolio Management
- Retirement planning
- Tax planning
- Estate planning and
- Risk mitigation
This way, you can avail customized investment-based solutions that align to the financial requirements or goals you have for a particular time-horizon.
Say for instance, when you are in your late 70s, you may want to plan your estate planning so that your property proceeds are divided between your business partners and your immediate family members in a smooth and streamlined manner.
Risk Management
An investment advisor clearly verifies the market volatilities of stocks, shares or bonds across stock exchanges and across other financial conglomerates. Therefore, you can allow your investment advisor take charge of your financial or investment-based portfolios indeed.
He exactly knows what investments you would have to retain inside your investment portfolio and what financial instruments can be sold off or disposed off immediately.
This is because when an economic slump down or a recession is declared in the world economy, most of your investment options can be rendered worthless.
Take the case of the global recession that was announced in the US in 2008. During this period, both Meriyl Lynch and Lehmann Brothers, the top two financial conglomerates in the US had signed up for their bankruptcy and declared themselves penniless. Therefore, most of the structured notes and bonds that were issued to customers were also rendered valueless.
Therefore, you need the constant guidance and support of your investment advisor to help you manage your assets effectively and not let an economic downturn erode your entire capital wallet. This is what is known as risk management in a nutshell.
The Bottom Line
Approaching a wealth managing firm or getting in touch with an independent fiduciary investment advisor can turn out to be a good starting point for newbie investors without the least element of doubt.
With so much of action happening here in the filed of investments or finances, you definitely need some kind of guidance or hand-holding support in order to put your best foot forward.
What are your thoughts on this? Do let us know in the comments below!
