Why Work with a Financial Advisor

By David R. Damm

If you are like most people, you probably see a doctor for health concerns and routine exams. When the need for legal counsel arises, you consult an attorney and if you own a business, you are likely to consult the help of professional accountant for payroll and tax planning. All of us rely on the expertise of others. It’s no different when it comes to your personal finances – most people could benefit from working with a “financial advisor”*.  Here are examples of the benefits:

You have good intentions,
but never set aside the time

Our industry has many tools to help educate families to do their own financial planning. Books, magazines, websites, webinars, and seminars all empower individuals to take a more active role in their financial future. None of these tools are effective, however, unless you take the time to become educated with the best method to apply to your personal situation. Working with a financial advisor forces you to stop procrastinating and shifts the commitment on the advisor.

Doing it yourself isn’t efficient

There is a long list of things that we would like to do ourselves but choose to pay someone else instead. For example, you could paint your house, but it may take you a long time to get the project done while a professional could do it in a timely manner for a reasonable fee. That becomes more efficient and most likely, with a better outcome. The same can be said for hiring a financial advisor that is focused on your personal goals.

It’s not that simple

Tax and industry related legislation changes, manager turnover, earnings reports, fee revisions, micro and macroeconomic updates are just a few of the things to be aware of when it comes to managing your investments. Understanding how the information will affect your portfolio and what changes may be needed are important decisions to managing a successful long-term investment plan. 

You are not objective

It’s hard to look at your personal finances and goals objectively, especially if you and your spouse aren’t on the same page. How much should you save for the short-term or for retirement? What are the methods of your savings and investments? How much risk should you take?  What fees are you willing to pay? A good financial advisor will navigate you through these difficult questions and recommend unbiased investment strategies for your plan.

You may be too emotional

To me, this is the greatest risk of individuals managing their own money. How to allocate your portfolio is one of the most important decisions for long-term investment success. If you are building your portfolio based upon recent events, market volatility or your emotions (i.e. greed or fear), you could be making a big mistake.  Even worse, you may make emotional decisions and changes to your long-term portfolio during times of market volatility.  A good financial advisor should help keep you on track to achieve your goals.

* For the purpose of this article, the term “financial advisor” is used to describe a licensed professional advisor
who employees the responsibility of providing a fiduciary duty to the client and avoids conflict of interest.
Contact our office for more information, 252-439-1344.

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