During excellent ecomonic times the majority of people find, the use of a financial advisor never enters their mind.head. However, once the markets go down and recessionary times hit, they often re-evaluate their original choice and look at the potential benefits of a financial advisor. Had they used the service in good times, the tough times wouldn’t be as difficult or overwhelming as they expected.
Who needs a financial advisor? The answer is simple, people with assets who want to maximize their growth,capitalize on their full potential, minimize their loss and avoid as much taxation as possible. Of course, that consist of the majority of people earning comfortable wages.
Financial advisors do much more than simply suggest a stock or sell you a product. In fact, many financial advisors work on a fee based rather than a commission based system. This protects the consumer from advice that would line only the pocket of the advisor. However, the best consultants often offer you the ability to choose whether you want strictly fee based advice or you want them actively to manage the money so you don’t have several different firms with which to deal.
When you consider a financial advisor, check their qualifications. Ask important questions about their training, years of service and amount of assets under management. Some financial consultants, however, don’t look after the money but simply offer guidance so they won’t have any assets under management. Ask about the courses of training, licensing and areas of expertise before you make your final selection.
While some advisors claim to do it all, it’s always better to find a team of advisors that work together. No one person can be an expert in every area. If you have specialized tax questions, the advisor that knows the stock market inside out may not be able to give you the answer your looking for. Teams that work together often have at least one tax specialist on board to help you through the murky waters of the tax laws.
Why would an average income earner or newly retired person need a financial advisor? People that aren’t millionaires actually need advice more than those who are. The reason is the remarkable affect that a mistake can have on their net worth. A loss that only amounts to a small percentage of a millionaire’s assets could be more than half that of the working person’s money.
If the lower net worth person opts for the safety of fixed investments, such as savings certificates, because he can’t afford to lose money, he could be losing in the end. While the certificates don’t decline in value, they also may not keep pace with inflation. The lower return on the certificates often is less than the increasing cost of goods and services. In the end, even if he made money, he loses the buying power of the original funds. Financial consultants are qualified to help you find the best available investments that provide safety and yet keep pace with inflation. They do it by offering a blend of various savings using a system of asset allocation.
Good financial advisor teams will give you solid financial advice and can help businesses or individuals. Over and over again they offer services to help guide business in areas such as financing, pensions and taxation. The expertise in both personal and business areas of finance can be helpful for the business owner’s personal income, personal pension and the success of his business. When you add businesses into the mix, almost everyone that earns an income and every entity, could profit from the advice of a financial advisor.
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