Updated: Feb 3
We want to start this article by stating that you do not need to be wealthy to get a Financial Advisor. We’ll say it louder for those at the back, you do not need to be wealthy to get a Financial Advisor.
According to Which?, a Financial Advisor scours the market to find investments and products that are tailored to your circumstances. They help you personally plan for the things you want to do with your money in the future.In simple words, a Financial Advisor is one of the core members of your 'money team' that will help you get your financial shiz in order.
The time to get a Financial Advisor can come at any point in your life. It’s common for a Financial Advisor to be used when it’s time to make those important decisions such as starting a family or planning for your pension. Equally, if you’re looking to get a grasp of your finances but don’t know where to start, a Financial Advisor can be a great step one. We repeat - you don’t need to rolling in millions to get a financial advisor.
So, now we’ve established what they are and when you might need one. Let’s look at what financial advisors actually do.
Financial Advisors help you set (and track) long and short term goals
So you know you want to retire at a certain age - great, you have a long term goals. But now it’s all about understanding the short term goals you have to accomplish to meet those longer term goals. Well, a Financial Advisor can help you plan out what that journey looks like.
And if you don’t know your financial goals but know you want to achieve something, having a conversation with a Financial Advisor can tease out your goals should and set you off on an action plan to achieve them. The great thing about Financial Advisors is that they require some form of qualification or membership with a professional body. Through this they are often well equipped with the regulatory and legal know how to help you a) identify the risks around your goals b) navigate and reduce the risks c) make the most out of your environment to reach your goals.
Provide expert advice
As the last paragraph mentioned, Financial Advisors have to be qualified to call themselves a proper ‘chartered’ Financial Advisor. In the U.K. this may be through The Chartered Institute for Securities & Investment or Personal Finance Society. As part of that qualification process, there are normally exams involved. Not only does a Financial Advisor have to pass the exams to become full fledged, they might also choose to specialise in a certain area. For example, you can choose to focus most areas from derivatives to securities to financial planning for children and families. A Financial Advisor will then be able to provide specialist knowledge within their chosen area - think of it like Mastermind but for finance (less game show like and more helpful).
It’s great to use your Financial Advisor as a source of education. In simple words, suck as much knowledge out of them as possible. Whilst it’s the role of a Financial Advisor to advise (as per the name), they also play a part in educating you by helping you to understand the core concepts to help you reach your goals. So if you’ve got a Financial Advisor and you want to get your money’s worth then use them to advance your knowledge in areas to meet your goals - whether this is investment, insurance or tax.
NB: Its important to check whether your Financial Advisor is properly authorised - you can use the Finance Conduct Authority’s Register for this.
Find the most suitable solution
Due to their specialist training and need to keep up with market trends, a Financial Advisor is the best person to offer you personalised recommendations on how to manage your money. The involves recommending the most appropriate products and services for you. They will ensure you have a bank account, investment account, pension or financial product that meets your needs.