Why is it important to consult a financial advisor?

January 29, 2020


Building a good investment portfolio and exploring new opportunities to grow their investments is a dream for many. But, managing finances can be challenging, and therefore they rely on a financial advisor. Read on to know more about why it is vital to consult an advisor.

There is no definite way to predict the investment market movement and how it would affect your investments. For new investors, understanding the dynamics of the investment market can be challenging. In such a situation, you should consult an expert financial planner while making critical financial decisions relating to investments and returns.

A report published in Economic Times in 2018 suggests that nearly 70% of the investors in India work with a financial advisor, as against 54% worldwide. The report further states that almost 54% of the young investors aged between 25 to 34 years rely on an expert advisor to manage their investments.

Do you need an investment advisor?

Investment management is not just about increasing the returns, but it is also about finding and exploring new ways of investment. It includes carrying out several tasks like continually keeping a tab on the portfolio performance, devising investment strategies, revising the maturities and maintaining a balanced portfolio.

However, amidst all these, you must not forget to consider the risk factors associated with various investments. This is where a financial advisor can help you. The investment advisors are experts who understand the intricacies of the market, and they provide the right guidance based on your needs and goals to increase the net returns.

Let’s understand the benefits of hiring a financial planner:

  • Dedicated attention to portfolio and advice

The professional financial advisor works in the best interest of the investor and puts their time and efforts to manage your portfolio. They have extensive knowledge of the different types of funds and have different investment strategies. Their expertise and functional abilities can be advantageous for your portfolio management.

  • Regular and thorough review of the investment

Sometimes, when the funds are not performing well or are not generating the expected returns, you may doubt the credibility of the fund manager. The best way to overcome this apprehension is to ask for a second opinion with your personal financial advisor. The financial advisor keeps a regular tab on your portfolio, and they do a thorough assessment of the same and provide regular updates of the market movement and advice to make the necessary adjustment.

  • Reduce stress

The primary objective of investing in various financial tools is to build a robust corpus for retirement and accomplish life goals. Managing the investment on your own can hinder the above purposes as it requires research and persistence. An experienced and efficient financial advisor will take full responsibility for portfolio management and help reduce your stress.

  • Get new learnings

When you are managing your finances by yourself, you may always be looking for new investment techniques and strategies. But when you work with an expert advisor, they will help learn the new methods. Every investment advisor has a unique approach. By analysing their decision-making process, you can learn a lot about the investment process and implement the same yourself in the future.

Thus, with so many benefits of consulting a financial advisor, you can be sure to improve the performance of your portfolio. The cost of financial advice may differ based on their reputation and experience.





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