The benefits for having and Independent Financial Advisor

Expertise:  A certified financial adviser is a full-time professional who will offer you a wealth of training, knowledge, qualifications, and experience. They would often have graduated with a university degree plus will have completed various industrial training programs. They will also have kept up to date by studying the latest developments in the markets and considered new investment opportunities. Their qualifications will include taxation and law.

Research:  A certified full-time independent financial adviser can spend time researching investment opportunities that are best suited to you.  If he does not already have the answers for your own particular business requirements, he will investigate and explore to find out what is best for you, so that you don’t have to.

Freeing up time for Relaxation: Investing for your retirement can be a very complex skill and very time-consuming. Also, to be a successful investor will require both time and money. Without a comprehensive financial understanding of the markets combined with your financial situation and your capabilities, investing becomes like a shot in the dark, like playing the lottery.

An independent financial advisor can save you a lot of time by managing your investments for you; this will of course liberate you from the inconvenience. Having found the right financial advisor you should be able to relax, safe with the knowledge that your finances are being taken care of by an expert investment professional. All the challenges the advisor will subsequently deal with would otherwise have been your burden.

Another point to note is your independent financial advisor may be able to mediate because perhaps you and your partner / spouse view finances differently. The adviser you choose can act as a mediator by taking emotion out of the issue and provide you both with informed and objective choices and advice.

Impartiality:  Possibly, one of the greatest threats to the performance of your portfolio are decisions based on your own emotions.  A financial advisor is there to help protect you from making mistakes.  Such mistakes can often undo months or sometimes years of hard work and even wipe out your portfolio altogether.

Your financial advisor can prevent this by providing impartiality and objectivity.  You are investing for the long-term, and a temporary shortfall in the market should not make you panic.  Your financial advisor can ensure that you are informed, based on emotion-free analysis.  They can work with you to establish the best outcome for your investments, and even make those investment decisions for you, without the risk of emotion.

Taxation:  Tax can easily erode any investment gains, so that a seemingly less attractive investment would have been more attractive.  A financial adviser can ensure that all possible tax scenarios have been considered before going ahead with an investment.  They can also advise you on ways to reduce your tax requirements around estate planning and improve your tax efficiency. They can tell you of the latest changes in legislation and notify you of new investments that offer better long-term gains.

Development:  One of the most significant benefits of a certified financial advisor is helping you to establish a lifetime plan for the future. A financial advisor can assist you in establishing your long-term objectives, attaching concrete numbers to these long-term plans, to make the most out of your income, and achieve your lifetime goals.

Disadvantages of an Independent Financial Advisor

There are potential risks to hiring an Independent Financial Advisor and perhaps the most significant concern is that they don’t always have your best interests in mind. Conflicts of interest may arise, despite many advisors making decisions that will benefit the client.

You may consider using a fee-only advisor. You could enquire and ask your potential financial advisor if he is willing to act as a fiduciary. Fiduciaries are required by law to recommend investments in the client’s best interest, not their own.

Costs: Financial advisors can be expensive, and not all of them will charge you in the same way. Some will charge a percentage of your total portfolio per year. Others will charge you an ongoing annual fee. Some can charge a one-off service fee, while the investment broker pays others via commissions. Before choosing a financial advisor, you need to determine whether the cost is worth the service provided.

Poor Quality Advice: Choosing the wrong financial advisor could end up being a costly mistake within your wealth-building objectives. As with any profession, not all advisors are competent. Ultimately, it is up to you to make sure that you are comfortable with the right financial advisor for your objectives. Best advice is to shop around, and don’t be shy when asking questions before making commitments. It is good to remember that it is your money, and you must understand what your financial advisor recommends and why.

If you choose the wrong advisor to work with, it could lead to poor decisions being made with your money. Ultimately, you are the one who must deal with the consequences of these poor choices when you reach retirement age. It is a good idea to ask each of them about their investing philosophy and to ask how they will craft their plans to meet your needs.

Conclusion

There are clear benefits and disadvantages to hiring an independent financial advisor.  The drawbacks can be alleviated, if not outright removed, providing you shop around, do your own research and ask the right questions. By surrounding yourself with the right people can bring you closer to your objectives, and finding the right financial advisor can be a valuable and important member of your team.