-Uday Sethi
Don’t we all hate spending money on things we consider can be done by ourselves? One such question that might have popped in your mind is that why pay for a financial advisor when you can manage your money all by yourself? But answer this, do you assemble your phone? Make your computer? Yeah, me neither.
The reason we look to avail the services of a professional is because they have more education and experience on the subject matter. The same goes for your finances.
What Exactly Is A Financial Advisor?
The term Financial Advisor is not an official title or name of a degree. It is a generic name for people who provide a wide array of financial services. And such services have specific training and education attached to it, like Certified Public Accountant (CPA), Certified Financial Planner (CFP), Personal Finance Specialist (PFS), Registered Investment Advisor (RIA), Chartered Financial Analyst (CFA), etc. It is possible for financial advisors to have more than one license; for example, a certified financial analyst can also be a certified financial planner. I know you might get overwhelmed and confused with so many abbreviations. Still, the bottom line is: Avail the services of someone who has the requisite training and experience and not trust your uncle’s cousin or old school friend for help with your finances and investments.
Why You Need to Work with A Financial Advisor?
Now that you are clear on what an advisor does, here are a few reasons as to why you need a financial advisor:
- They would help keep you on track with your financial goals
- They would do more than just invest your money – they also help in tax planning, risk management, wealth creation, long term financial planning, etc
- They would help eliminate any emotional quotient you might have while investing
- They would help you save time and stress. They would also be more informed about the market and what’s up or down.
As every good poker player knows, you won’t be able to make money if you are scared and too afraid to take risks. The best financial advisors can keep their client’s fears and emotions in check by sharing fact-based advice and providing reassurance when the markets get crazy. Financial Advisors can also help in preventing the most common mistake people make -selling low and buying high.
As far as we Indian investors are concerned, we never want to pay for financial advisors; instead, we gladly buy an insurance policy from our fathers’ best friend. But what we don’t realize is that amount a financial advisor would charge is far less than the money we lose annually when we invest in an ad hoc manner and buy from product sellers who work on a commission-based model. A financial planner working on a fee-based model, on the other hand, would offer you advice, which is purely for your benefit and would keep your interests above.
But it all starts with you. Your financial future is in your hands. And if you don’t take control of your money now, then when? It’s time for action!
