Hiring a financial advisor is a decision you want to make sure you get right. It can be difficult to know when to hire an advisor, or what to look for in a financial advisor. Our latest show, How and When to Hire a Financial Advisor!, is all about what you need to know when hiring a financial advisor. Everyone knows a financial advisor will help with investment management, but what else will a real financial planner offer?
Help determine if you are properly insured
Your financial advisor should help you determine if you have enough insurance and in which areas you are lacking coverage. Making sure your risks are properly covered is one of the most important parts of the financial planning process. Lacking insurance that you need could be detrimental to you and your family. Your financial advisor should work with you to help ensure that your risks are covered, but also that you don’t have more insurance than necessary.
Plan for retirement
Every true financial planner needs to be helping you determine how to meet your retirement goals, and in many cases may be the reason you hired a financial planner in the first place. Your financial advisor will ensure that your retirement plan is likely to succeed, and if it isn’t they will suggest implementing changes. Changes may include adjusting your savings rate, planning to spend less in retirement, or staying in the workforce (either part-time or full-time) a little longer. All of your retirement savings will be for naught without proper retirement planning.
Manage your money
Almost all who call themselves financial planners will be able to manage your money. Different financial advisors will have different approaches to managing money, so you will need to find someone who’s values and beliefs about investing are similar to your own. If you aren’t on the same page with your financial planner in regards to managing your money, the relationship might not work out.
Help plan for college
Financial advisors are a great resource to have when it comes to planning for your children’s future college education. They can advise you on the best strategies for saving for college and can help determine how much you should be saving in order to meet your college savings goals. With the ever-changing landscape of college tuition rates, it’s good to have an advisor on your side to help you navigate towards your goals.
Determine how big your emergency reserves should be
Emergency reserves needed are different depending on how many people in your household work, what your job security is like, and how specialized your role is. A financial advisor can help you determine how big your emergency reserves should be, or if you have been overly cautious and saved more than necessary in cash.
Help you with charitable giving strategies
If charitable giving is part of your financial plan, your financial advisor can advise you on the best ways to give. Certain giving strategies could benefit you (and your charity of choice) more than others, which could mean greater tax efficiency for you and more money for the charity.
Make sure your actions are tax-efficient
Tax planning should be part of every step of the financial planning process, as taxes will show up whenever you are dealing with money. Your financial advisor should always be looking out for unique strategies you can use to be more tax-efficient, not just in April but throughout the year.
Our latest show, How and When to Hire a Financial Advisor!, is available to watch below. Learn more about what you need to know when hiring a financial advisor, what questions you should ask them, and at what point it makes sense to hire an advisor.