You work to earn a living. You understand your income levels, expenditure, and the need for investment to enhance financial security. Also, you know that money markets such as insurance, stocks, and investment schemes are necessary to build a robust financial portfolio.
So, I bet you’re wondering, “Why do I need a financial advisor?”
Financial advisors have extensive knowledge of money matters. They offer guidance on how to plan your finances in conscious and efficient ways.
But why would you need a financial advisor as a Singaporean? Here are several reasons why a financial advisor is so essential:
They Provide Guidance on Financial Products & Services
Finance is a complex subject, what with terms like money markets, investment schemes, diversified funds, stocks, treasury bonds, and more, you could easily get overwhelmed.
These topics require extensive understanding before you decide where to invest your money. Without prior knowledge, your money could go down the drain, leaving you in a worse financial situation.
A financial advisor has the expertise to guide you on how to grow your money carefully. They understand the ins and outs of cash investing, stocks and bonds, mutual funds, money markets, and real estate investing.
They can also advise you on budgeting your income, risk management, wealth management, and estate planning. Once you engage a financial advisor, they will analyse your financial situation, craft a plan, and recommend the best investment approach for your case.
This way, you get to avoid trial and error trait, which can result in substantial financial losses.
They Help Avoid Unnecessary Expenses
Financial planning is the assurance of a successful future and wealth creation.
While this is so, poor planning can result in regrets and added expenses. For instance, choosing expensive financial plans can be a turning point, and not for the better.
Fortunately, a financial advisor can help you avoid such plans. These advisors analyse the best-in-market options before recommending specific product plans or investment approaches. They also help you to understand each financial product in detail, and pick one fit for your purpose.
In this essence, you’ll only go for plans that match your needs while avoiding expensive and unnecessary ones, maximising your financial health and success.
They Help Keep Your Investments on Track
While we may think we can make a lifelong financial plan on our won, the intricacies are much more complicated than we realise. Financial advisors help you to come up with pertinent questions that you may not have thought of yourself and help to direct your overall plan. These include:
- How much money should I save for retirement?
- What’s the best investment strategy for my age?
- What’s the best investment fund for my children’s education?
- Should I change my investment portfolio as I get older?
- How can I begin estate planning?
- How can I leverage the equity in my property?
A 2016 study from John Hancock showed that individuals that choose to work with a financial advisor had better retirement preparedness.
They Eliminate Emotional Financial Decisions
People tend to get emotional when it comes to their money. Financial advisors are vital as they help you to invest in portfolios that best match your appetite for risk.
Making decisions under pressure or on “gut feelings” could result in financial losses and a host of regrets. Where risky investment strategies are concerned, like investing in the stock market, you’ll need the professional guidance of a financial advisor.
If you have a financial advisor assessing your investment decisions, they’ll be better placed to help you keep a healthy emotional distance from your money, and stop you reacting irrationally to stock market changes.
They Hold Your Hand through Life Changes
Life is unpredictable and can change in an instant. Are you single? Well, you may get married tomorrow, divorce, have a child, lose your job, or succumb to ill health in an instant.
Would you understand how to deal with the tax consequences of losing your job, losing your partner, or inheriting a large sum of money? What about adjusting your expenses, liquefying assets in times of trouble or investing money after a windfall?
Financial planners help you to navigate drastic life changes and recommend products and services that can protect your wealth. They walk you through deciding what to do with your money and how to handle any tax fallouts or loss of income scenarios.
This planning especially comes to focus when you are about to retire. You may not be sure on how or when to start withdrawing any retirement benefits, how these withdrawals may affect your investment, and what to do should you suddenly find yourself needing more money than you have.
Financial advisors sit down with you and walk you through all these scenarios to better protect your money.
In a word, financial advisors play a vital role in your lifelong financial planning journey.
Their expertise and understanding of money matters act as pillars to the development of stable and sound financial plans. By considering them, you’ll gain extensive insights on how money works, and avoid trial and error, which is a risky practice as far as money is concerned.
If you require a dedicated financial advisor, do not hesitate to reach out to us or call +65 XX XXXXXX. At Wealth Advice, our team is highly qualified to help you look at your current financial situation and figure out how to grow from there.