Is it Worth Paying for a Financial Advisor
Managing your own finances can be daunting and most people are time poor and unsure of where to start.
This is where a financial advisor steps in, they offer guidance, expertise, and careful consideration to guide you to optimise your finances.
In this blog post we will be identifying the benefits of a financial advisor and if it’s worth paying for a financial advisor in Australia.
Goal setting is often the first step in the financial planning process and sets the foundation for your advice. A financial advisor can help you to identify your goals and provide clarity. The acronym SMART (specific, measurable, achievable, relevant, and time-bound) is a helpful tool for goal setting. For example, instead of a goal being I’d like to retire soon, the goal could be expanded to: I’d like to reduce to a part-time role in 5 years, retire completely in 10 years on a yearly net income of $100,000, and be able to travel overseas each year at an additional cost of $10,000 per trip.
Without a clear plan, many people find themselves drifting financially, unsure whether their savings are enough, or investments are aligned with their long-term goals. Financial advisors help create a roadmap that allows you to envision your financial future with more precision ensuring you are heading in the right direction.
A financial advisors role in understanding your goals extends beyond simply listing out your financial aspirations. We dig deeper to understand your lifestyle, priorities, and concerns. Our approach is personalised, and ensures that the financial strategy is not just about numbers but also achieving a life that aligns with your values and goals.
Expertise and Knowledge
Financial planning involves extensive knowledge of investment strategies, tax implications, regulatory and legislation change, aged care, superannuation, insurance, cash flow, budgeting, and more. A financial planner can consider how each strategy will impact the key areas of advice and how to best position you.
In addition to understanding the fundamentals of finance, a good financial advisor keeps up with the constant changing laws and regulations that could affect your finances. For instance, rules for superannuation, taxation, contributions, retirement, insurance, and government benefits change frequently. By not adapting to these changes it can have significant implications.
Further, as advisors we bring a wealth of experience. We have likely helped clients in similar financial situations, which means we can anticipate challenges and provide solutions. We also have a deep understanding and knowledge of different financial products and investments. Because of this knowledge we can help investors with options that they might not have been aware of. This expert guidance can make a big difference in helping you navigate the complex area of wealth management.
Investment Management
Investing is a key component for building wealth and achieving financial goals. However, navigating the financial markets can be complex and challenging. The benefit of a financial planner is their ability to guide you to which investment best suits your needs whilst taking into consideration your goals and risk profile.
The value of professional investment advice isn’t just in selecting the right assets, it also includes rebalancing your portfolio over time. Market conditions change, and what started as the right mix of assets may no longer be suitable after some time. We monitor these changes and make adjustments when necessary to keep the investments aligned to your goals.
Planning for retirement requires careful consideration and a range of factors are considered such as, savings, expenses, retirement and investment assets, and Centrelink eligibility. A financial planner can help set realistic retirement goals and develop a strategy to achieve them. We conduct detailed analysis to determine how much you need to have in assets, when you can retire, and what lifestyle you can afford in retirement. Further, if we identify that you are falling short of your retirement goal, we can assist in working towards getting you there.
Risk Management and Insurance
Life is full of uncertainties, and life events such as illness, disability, or death can derail financial goals. A financial planner helps to assess and mitigate these risks by recommending appropriate insurance solutions.
Financial advisors also help to review and update your insurance as your situation changes. What was appropriate when the policy first commenced may no longer suit your needs. An advisor can help to ensure that the risk management strategies remain appropriate over time.
Behavioral Coaching
Emotions play a significant role in financial decision-making, leading to impulsive or irrational behavior that can have poor long-term financial outcomes. An example of this is the COVID-19 market crash, the sudden and continuous fall of the stock markets caused many investors to panic with some making the wrong decisions due to the heightened emotions they felt at the time. A financial advisor can be your behavioral coach, providing guidance and perspective to help you stay disciplined and focused on your goals, especially during periods of market volatility or economic uncertainty. A financial planner helps you to stay on course and avoid costly mistakes.
The psychological aspect of investing is often underestimated yet it plays a critical role in financial success. Fear and greed are powerful emotions that can lead to poor financial decisions. We act as a sounding board, helping you to assess whether your emotional reactions are justified or if you should stick to the course.
Peace of Mind
One of the most valuable benefits of working with a financial planner is the peace of mind that comes from knowing your finances are being managed by a professional. By trusting in a qualified professional, you can alleviate the stress and time associated with managing money on your own. With a solid plan in place, you can feel at ease knowing you have set clear, concise goals and a structure of strategies in place to achieve them.
Financial peace of mind also means having the confidence that your plan is being executed effectively. By working with an advisor on a regular basis you ensure that your position is being reviewed regularly and your strategy is being adjusted. This level of assurance allows you to focus on enjoying your life, knowing that your financial future is in safe hands.
At Unified Wealth our team is highly experienced and provides goal-based advice and solutions for a range of advice strategies.
Financial advisor in Woodend, servicing Macedon Ranges and surrounding towns.