The Importance of Having a Financial Advisor

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If you worked for several years and have saved some money, you need to know how best to invest that money. If you are retired, and have a pension and / or 401K plan, you need to be sure your savings and pension are invested wisely to guarantee a worry-free future. Today, financial information is available on the internet and many people who have assets follow the stock market and investigate ways to invest their assets. However, there are so many different types of financial instruments today offered by both small and large investment firms and banks, that it is truly impossible for any single individual to understand everything that is available for them, and what is best for them. Everyone has different financial needs and goals, and the only one who can really put the right investments in place for those needs and goals is a good financial advisor.


No financial advisor gives foolproof advice. As everyone knows, financial markets are fickle and can turn on a dime. However, a good financial advisor will try to minimize the financial risks for you by gaining an understanding of your particular situation and lifestyle goals. The financial advisor must be aware of all of your assets, your current lifestyle, and your retirement goals. For example, the financial advisor needs to ask the following: If you are not already retired, do you have a timeline for retirement and a lifestyle goal after retirement? If you are young and married, or with a partner, do you have children or plan to have children? How much ready cash do you need yearly? Do you like to be conservative in your investments, or do you want to take some risk? How much risk are you willing to take? These are just a few of the questions you will be asked by a financial advisor.

Many large financial services firms use a special tool or investment questionnaire that you will be asked to complete with the financial advisor in order to answer these types of questions. The answers to this questionnaire are then analyzed to help the financial advisor put together an appropriate investment plan.

Once the financial advisor has an understanding of your assets and goals, the financial plan should include a diversified portfolio of various instruments to meet your goals. Depending on your age, lifestyle needs and retirement goals, there are basic formulas for ensuring that you don’t have too much stock, or too many bonds, or too much ready cash not invested. If your financial advisor is with a large investment firm, there are financial instruments that mix stocks and bonds and therefore give you an upside no matter what happens in the stock market. There are also investment opportunities in overseas markets and funds.

The good financial advisor will make you aware of the various options that will neither give you a windfall, then let the bottom fall out, or be too conservative that you will make little on your investment. The keyword in investment is balance. A good financial advisor will help you strike a balance.


Everyone has read the headlines about those financial advisors who have lost people’s life savings. Sometimes it is difficult to know whether you have a good advisor. However, if you do a little research, and ask the right questions, you can be somewhat confident that you have a good advisor

There are many ways to do research on financial advisors. The internet is certainly a good source of investigating advisor reviews. In addition, buy some of the investment related magazines, such as: Business Week and Money Magazine. These magazines usually discuss advisory services and latest trends in the markets. The September 11, 2006 Business Week On-Line issue has an article entitled, “Taking Stock of Your Financial Adviser”. The article provides seven questions you need to ask to learn if your financial advisor is good. It is also a good guide if you are looking for a financial advisor, and outlines the fees involved in financial advisory services.

It is also important to do research into financial services firms who provide advisory services. There are many large and small financial services firms, but before you seek the services of these firms, find out something about their advisory services, their investment philosophies, etc. The larger and more well-known financial services firms will obviously have a broader range of financial products to offer, and their advisors should be more skilled.


Once you are on board with a financial advisor and your portfolio is put together, you need to monitor that portfolio. You should reach an agreement with the financial advisor on how often you will review together the performance of your portfolio. Most financial advisors will meet with you at least yearly to do a complete review of your portfolio’s performance and discuss potential changes to the direction of your investments. In the interim, you should not feel shy to ask questions as you review monthly and / or quarterly statements of your portfolio’s performance. Sometimes investments will need to be adjusted prior to a formal meeting with your advisor, especially if your life situation changes, or the markets change radically.


The bottom line of smart investing is that your assets should grow over time. Trusting a financial advisor, and being confident that he or she is giving you the best advice over a number of years is critically important to you and your family’s future.

The bottom line of any discussion is that it should end with an ultimate conclusion where you take the right decisions at the right time and having a financial advisor is of utmost importance in current times as people are known to spend lavishly on futile things apart from being aware of how much does a financial advisor cost as they all charge differently based on their stature.

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