Thursday, October 06, 2016

16 Valid Reasons You Need a Financial Advisor

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October is Financial Planning Month. If doesn’t matter if you make $20,000 or $20,000,000 a year, everyone needs help with managing their money and meeting their financial goals.  You can use self-help resources such as books, television shows, seminars or courses but you may reach a point where you need additional help, that’s when a financial advisor comes in handy. If you do not have a financial advisor you should consider hiring one as your income increases, lifestyle changes occur such as marriage and children and assets increase such as purchasing a home, investment property or starting a business.

Financial advisors help clients reach their financial goals including retirement, paying for college education or starting a business.  Some financial advisors can also assist with creating a budget or spending plan, paying down debt, choosing investments, managing their finances, taxes, savings and wealth management.

There are 2 types of financial advisors:  fee-only and commission-based.  Fee-only advisors charge a fee for their services usually $150-$300 an hour or per session or may charge a fee based on the annual percentage of assets that are managed. Fees should be disclosed up-front. Fee-only advisors offer unbiased advice because they are not motivated or required to sell products and services to get paid.

Commission-based advisors receive a commission by fund companies or brokerages for the sale of financial products and services and receive a percentage of the total amount clients invest in specific products.  Commission-based advisers receive a percentage of the total number of transactions a client makes and may charge 0.5% - 2% of the assets they manage for each client.

A financial advisor can:  help you generate more money for you and your family, help you to be better prepared for changes in your life (death, illness, layoff, children, etc.), provide protection against mistakes and unexpected circumstances (death, illness), provide stability and peace of mind by ensuring your financial goals are met, save time, provide guidance on retirement and investment options, decrease your tax liability, determine insurance needs, minimize taxes, analyze risks, and develop a plan to manage your business finances. Here are 16 reasons you need to hire financial advisor or financial planner:

  1. You want to learn how to track spending.
  2. You need help to create and meet financial goals.
  3. You want to plan for retirement.
  4. You want to address credit issues.
  5. You want to develop good spending habits.
  6. You want to organize your finances.
  7. Getting married or getting a divorce.
  8. You experience a financial crisis.
  9. You buy or sell a home or investment property.
  10. If you have $300,000 or more in investments.
  11. You have a lump sum of money to invest.
  12. You want to retire early, start a business or do volunteer work in another country.
  13. You want to setup investments accounts to fund college education or other expenses for family members. However, you should contact an estate attorney to setup trusts of similar types of accounts.
  14. Death of a spouse.
  15. You want to donate a large sum to charity.
  16. You want to analyze your insurance needs.

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