A Professional Financial Advisor Can Add Value to Your Portfolio.
Take a quick glance at any newsstand or bookstore and you’ll find endless variations on the theme of achieving financial security. Try searching the Internet for the phrase "beat the market" and you’ll trigger an avalanche of investment websites. With so much information out there, what more could a professional financial advisor possibly have to offer you?
Specialized knowledge, training, and experience.
Sure, there’s plenty of information available to any would-be investor, but sifting through all the facts and theories takes a great deal of time - time that you may not have. A qualified professional has access to data, time for thorough research, and, most important, the knowledge, training, and experience to properly evaluate this information.
Guidance in a complex financial world.
Today, you have an incredible variety of financial products and investment options to choose from. Understanding all the options and keeping up with new opportunities isn’t for amateurs. Professional insight can help narrow the choices to those that really suit your needs.
A complete, long-term financial plan customized for your personal needs.
More than just picking stocks or mutual funds, a professional advisor can help integrate your various financial goals and needs into one coherent plan. By understanding your unique personal goals, he or she can recommend a detailed strategy for reaching them - as well as monitor and adjust this plan over time.
Objectivity and discipline.
A financial professional can also offer objective assessments of market developments - especially during turbulent times, when investors tend to act emotionally instead of rationally. This "voice of reason" role is important, because failure to stick to a long-term strategy can be costly. Your financial advisor can provide a sensible, long-term perspective to deter you from making impulsive decisions that may have negative financial consequences.
COMMON MISCONCEPTIONS ABOUT PROFESSIONAL FINANCIAL ADVISORS
"Only rich people need a financial advisor."
You don’t have to be rich to have important financial goals, such as homeownership, college education, and a comfortable retirement. Don’t your goals deserve the attention of a professional, too?
"It costs too much to use a financial advisor."
Financial advisors are compensated for the services they provide, just like any other professional. But keep in mind that a good advisor adds real value by helping you make the most of your money - not to mention saving you time and stress.
"With a financial advisor, I’ll beat the market every year."
Short-term outperformance isn’t the best way to evaluate a professional advisor. After all, an important part of the advisor’s job is to avoid short-sighted moves that may jeopardize your long-term success. Instead, you should consider whether your advisor is following the plan you agreed on for seeking both your short- and long-term goals.