Investing isn’t easy. It can take time, research, patience and knowledge of financial markets. Fortunately, you can simplify the process and increase your chances of success by working with an investment professional.
Although some people enjoy investing on their own, the reality is that most of us can benefit from the services of a financial advisor. With professional help you can take much of the work out of investing and increase your potential for reaching financial goals.
The job of establishing, monitoring and maintaining your investment portfolio is easier and more effective when you have help. You’ll benefit from the skills and knowledge of a seasoned professional who is well-acquainted with your personal situation and objectives. And when you stick with one advisor who sees the “big picture” of your financial life, you get well-rounded help and advice from somebody who has a full grasp of your finances.
A good relationship with a financial advisor* will help you:
Understand your financial needs: Your advisor will review and analyze the current state of your finances and investments.
Set goals: Establishing realistic financial goals is easier with professional help. No matter what your objectives-perhaps retirement, saving for a child’s education, buying a house or reducing income taxes-it’s important that they be achievable.
Develop a financial plan: Once goals are in place, you and your advisor can develop a savings and investment plan to meet your long-term objectives. This includes a strategy for funnelling more of your income into savings and investments.
Assess risk tolerance: An advisor can assist you in determining the level of risk you’re comfortable with, and show you how to balance that risk with potential investment returns.
Establish a portfolio: With professional help you can choose investments for a balanced, diversified investment portfolio that reflects your goals and risk tolerance.
Save on taxes: Your advisor can show you how to structure a portfolio that takes advantage of tax breaks available for many types of investments. This includes both your Registered Retirement Savings Plan and non-registered investments.
Review finances and investments: It’s important to regularly monitor the progress of your plan. An investment professional has the tools to measure the performance of your portfolio against your expectations and market conditions. When adjustments are necessary, your advisor can suggest appropriate investments.
In addition to helping with savings and investments, an advisor can offer assistance in other areas of your financial life, including insurance, estate planning and business planning.
How will you know if you’re a candidate for professional help? Unless you have extensive knowledge of finance and investments and are willing to put a lot of work into managing your financial life, establishing a working relationship with an investment professional is always a good choice.
There’s nothing wrong with going it alone by using services such as discount investment brokers, but that route is best suited to those who enjoy managing their own affairs and have the time and expertise to take on the job.
As an independent investor, you’ll have to dedicate time to researching the multitude of investments available through financial markets, put together your own portfolio, monitor your finances and investments, and perform a host of other tasks. Many of these require specialized knowledge.
Even if you’re a knowledgeable investor, it doesn’t necessarily mean you have the time or energy to spend on managing your investments. Professional help puts much of the work on somebody else’s shoulders, while still letting you play an active role in managing investments.
Jodi Nastor, CFP
390 McNabb Street Unit 2