I’m great with money! Why do I need a financial advisor?

When was the last time you asked someone for advice?

“What should I eat for lunch?”

“How can I get a better job?”

“How do you get your baby to sleep?”

“Where should I go on vacation?”

“Should I be worried about this dark mole on my back?”

Every day, you rely on the advice of people you trust to help you make decisions – both big and small. So when it comes to managing your finances why are you trying to tackle it solo? Or worse, asking your equally unqualified friends what to do?

The financial decisions you make early on can have a huge impact on your life, so enlisting the advice of an expert can go a long way to helping you reach your goals. There are many ways a financial advisor can help you – here are just a few reasons you should consider working with one:

You’re emotional

Put aside the spreadsheets for a moment because money issues aren’t just black and white –   they can be very emotional.

Ask yourself:

What are your dreams? Where do you see yourself in five or ten years? Do you want to own a home? Do you want to fill that home with children? Do you want to send your kids to college? What does your retirement look like? What’s your tolerance for risk? Who depends on you today and in the future? What kind of legacy do you want to leave behind when you die?

These are just a few of the questions your advisor will help you reflect on. So you can see that when it comes to managing your money, it makes sense to bring in an impartial expert who has your best interest in mind but isn’t emotionally attached to your investments.

You need to know where to start

Once you’ve identified your goals, your advisor can assess your current financial health. This could include looking at your total assets and liabilities, investment performance, emergency fund, credit score, income, earning potential, taxes, estate plan, insurance coverage – you get the idea.

Wow, that’s a lot of information to make sense of. But that’s what your financial advisor is for! Financial planning is about so much more than just making a budget and purchasing a few mutual funds.

Basically, they’ll help you develop a clear picture of where you are today (i.e. a benchmark) and what it will take to get you to each of your goals (those emotional questions I asked you earlier).

Your goals won’t magically achieve themselves

You’ve identified your goals (great!). Now you need a financial plan that aligns with your values and priorities but is also realistic and achievable. Can you really afford the dream life you’ve envisioned? Maybe! A financial advisor can help you make that plan.

And when you start to hit new life milestones like buying your first home, getting married, having kids, caring for aging parents or getting ready for retirement they’ll help you adjust your plan and ensure you’re still on track.

Because if you’ve never been married, had a baby, purchased property or arranged your estate before then you’re bound to have at least a few questions, right?

You don’t know what you don’t know

I don’t know about you but financial literacy isn’t something I was taught in school. So while I’m well versed in quadratic equations, I still struggle to do my own taxes. You could spend hours reading up on personal finance, or you could fast track by getting your very own tutor (financial advisor).

Every time I speak with an advisor I’m amazed at how much I don’t know. Financial advisors are educators – they can:

  • Break down complex financial concepts
  • Help you decide where to invest your money
  • Advise you on what types of insurance you may need
  • Help you understand tax implications
  • Provide you with tools to help you make informed projections
  • Calculate interest rates and how they will impact your rate of return

These are just a few examples, but basically they can help you understand complex investment, insurance and tax matters. They do the math that you don’t want to do, or maybe even know how to do.

You need access

If you want to trade stocks, you’ll need to enlist the services of a broker. If you want to protect your family, you’ll likely need to consult a life insurance advisor/agent. If you need help with taxes, you’re probably going to need an accountant.

Depending on the products and services you’re looking for, you may need to engage with one or more advisors to get access. And this makes sense, because each one is highly educated in their domain and should have the proper certifications and designations to help you make informed decisions.

At the end of the day, it’s your money and you can choose to do whatever you want with it. But a financial advisor can help guide you in the right direction through behavioral consulting, impartial advice, helpful lessons and valuable tools.

All investing involves risk, including the risk that you may lose money. Nothing herein should be construed as investment advice or a recommendation to buy or sell a mutual fund share or other security.

Foresters, its employees and life insurance representatives, do not provide legal or tax advice. Consult a tax or legal advisor regarding estate planning.

414197 CAN/US (08/16)

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Jennifer Peckett

Jenn has a background in partner management and content marketing. She loves to tell stories through a variety of mediums including blog articles, videos and media materials. Jenn covers community outreach and personal finance topics. She enjoys putting a personal spin on her articles to help make finance topics relatable – while still educational!