There are a lot of questions that come up when people begin thinking about the best ways to invest and financially plan for the future. Whether you’re just getting started thinking about investing or you are decades into it, you may have wondered whether hiring a financial advisor is a smart move. Is the cost worth the investment? If you’ve been wondering why you should hire a financial advisor, we’re here to address your questions and give you some answers!
Financial advisors can’t see the future
As you probably already know, financial advisors can’t see the future any better than you can. While we’re trained and experienced in the financial world, we’re not magicians.
If you’re considering hiring a financial advisor in hopes of beating the market or increasing your return with “better” investment strategies, you will likely be disappointed.
The typical advisor charges about 1% in fees. In most cases, your returns will be close to market rate minus that fee. When it comes to predicting market movements, our crystal ball is about as good as anyone else’s. So why hire an advisor at all?
Two reasons to hire a financial advisor
Here are the two main reasons that we would suggest considering hiring a financial advisor to prepare for your future.
1. A financial advisor helps you stick to your investment strategy
First of all, a financial advisor can help you stick to the strategy that you have made together. When there is market tumult and emotions run high, it’s easy to want to change your investment strategy. We understand the stress and worry that these times can bring! However, in most cases, this does more harm than good.
A financial advisor will help you stick with your long-term investment strategy. In many cases, people end up going to cash because they can’t take the pain of further market losses. This is a common way that the average investor locks in poor investment returns. Unfortunately, it’s these kinds of poor decisions that lead to poor investing outcomes.
Sadly, all it takes is one bad move and you can literally destroy your retirement funding. For this reason, a financial advisor is a sort of “safeguard”. They will help you stick to your plan and not make emotional decisions that can lead to devastating outcomes.
2. A financial advisor helps you see blind spots
Next, another main reason to have a financial advisor on your team is to help you see and uncover blind spots in your financial picture. Some of these common “blind spots” include using the right types of accounts, having sufficient insurance in place, taking advantage of tax opportunities, and avoiding mistakes that could have costly consequences down the road.
Financial advisors have the benefit of not only being familiar with a wide variety of aspects of financial planning, but also having gone through the process with dozens and dozens of different situations.
A good advisor will review and become familiar with your entire financial situation. Typically, this is done through a financial planning engagement.
Why hire a financial advisor?
While sticking to your investment strategy and watching for blind spots are some of the main reasons that we recommend having an advisor on your team, they’re not the only reasons. Here are a few more points to consider when wondering how a financial advisor can help prepare you for financial success.
- An advisor can save you a lot of time in researching investment strategies
- They’ll keep you accountable to your financial goals
- They can help you decide where to invest your assets
- An advisor can help you make a plan to be well prepared for retirement
- They’ll help you decide on the best retirement investment choices for your personal situation
- They can assist you in the transition from your working years to your retirement years
- They can help you ensure that you’re protected for life’s surprises no matter your age
What questions do you have about your financial situation?
At Milestone Wealth Management, the reasons listed above are just a few ways that we help our clients to successfully prepare for a secure financial future. As a small, independent firm, it’s our priority to get to know you and your personal situation before offering financial advice. We want to make a plan that’s tailored to you and to your success.
Ready to get the conversation started? Book a meeting today and let’s create a plan to help you meet your financial milestones.
This material is not intended to replace the advice of a qualified tax advisor, attorney, or accountant. Consultation with the appropriate professional should be done before any financial commitments regarding the issues related to the situations above are made.
