Reasons Why You Should Be Using a Financial Advisor
While past generations could rely on company pensions and guaranteed lifetime income in retirement, the current crop of workers does not have that luxury. For workers who know how to make the most of their investments, this shift can be a good thing, but for those who lack investment prowess, the results of a lifetime of saving can be quite disappointing. If you are trying to make sense of your investments and build for the future, there are plenty of reasons to work with a financial advisor. For most of us, investing is not a suitable DIY project, and with your future on the line, you need to find every advantage you can. Here are some reasons you should be working with a financial advisor.
Specific Expertise
You would not do your own brain surgery, and you would not attempt to rewire your home unless you had specific training and expertise. The same goes for your finances, and trying to make sense of the stock market, bond yields and dividend dates on your own can be a daunting task indeed.
By working with a financial advisor, you can benefit from the training and expertise that individual has accumulated throughout the years. That expertise can be invaluable to your finances, and it is perhaps the most important reason to use a financial professional.
You Could Lower Your Tax Bill
When it comes to investing, it is not how much you make -it is how much you get to keep. High returns will do you no good if most of the money goes to taxes, so tax planning is just as critical as investment success.
A good financial advisor will understand the impact of taxes and structure your investment portfolio accordingly. From moving income-producing securities to tax-advantaged accounts to using unrealized losses to offset capital gains, experienced financial advisors can use a variety of strategies to lower taxes and boost after-tax performance for their clients.
A Professional Could Boost Your Investment Returns
Many DIY investors fear that a financial advisor will cost too much, but the opposite may actually be true. Far from costing money, a quality financial advisor can pay for themselves through increased returns, lower investment expenses and better long-term performance.
Results will vary, of course, and it is important for financial advisory clients to review their own performance compared to common benchmarks. By comparing their own performance to market averages, clients can make sure they are getting the most for their money, and boosting their performance for the long term.
Protection for Your Spouse and Loved Ones
In many cases one spouse will take the reins when it comes to finances and investing, and the other spouse will simply sit back and benefit from their partner's experience. That is fine as long as both spouses are alive and in good health, but an unexpected death or disability could send the family's finances into a tailspin.
By working with a financial advisor, the individual responsible for the family finances creates an important safety net for their loved ones. If something were to happen, the surviving spouse can simply pick up the phone, discuss the situation and ask for advice and guidance.
Investing for the future is a complicated process, and it can be a daunting task. If you want to make the most of your hard-earned money and build a solid nest egg for the future, working with a financial advisor can be a very smart move. If you are not currently taking advantage of professional investing advice and guidance, the advantages outlined above could convince you otherwise.
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