Monday, May 14, 2007

Do You need a Financial Advisor ?

Do You need a Financial Advisor ?

When it comes to Mutual Fund investment, do you feel like a rudderless ship without a plan or a map? Or do you feel that you have a pretty good sense of where you are going? Maybe, you are somewhere in between. How do you know whether you should hire an expert or do it yourself? You may be capable of doing the job yourself if you are willing to do some homework. But unless you have the time, ability and desire to manage your portfolio, a good financial advisor can be a tremendous asset—if not a necessity. He can help you know where you are going so that you can end up where you need to be. Most of you would not think twice about hiring an attorney or finding a good medical doctor. A good financial advisor should fit into this same category.

The necessity for a Financial Advisor stems from the following factors.

Accords top priority to understanding you and your goals

Financial advisors make it their business to learn who you are, where you are with your Fund investment program and where you want to go. From this getting-to-know-you process, your advisor can offer customised investment strategies for
  • enhancing your after-tax return opportunities,
  • funding your children's education,
  • funding your daughter’s marriage,
  • planning for your parents' financial needs in later years,
  • retirement planning.
Your financial advisor can help you create a long-term investment plan that fits both your objectives and your budget requirements ... right down to how much you need to invest per month to reach your goal.

Recommends funds tailored to your individual needs

Mutual funds offer professional management, diversification and liquidity. But how do you choose among the hundreds of funds out there? Your financial advisor can help you see how well a fund's objectives, track record and management style match your specific needs and goals by keeping you informed about
  • how much aggressiveness the fund's managers will assume to achieve their objectives,
  • the fund's performance compared to other funds with similar objectives,
  • how the fund has done in bullish as well as in bearish markets,
  • the fund's performance vs. its respective investment indices over different time periods and
  • the types of securities the fund invests in and how those securities can affect its performance

Aids you in the allocation of your assets

Against the backdrop of your objectives, time horizon and risk tolerances, your financial advisor assists you in allocating your money to the different funds so as to enable you to savour the different fund flavours and achieve the desired diversification.

Reviews and rebalances portfolio regularly

Just as you do a health check periodically, according to changing lifestyle and age, it is prudent to meet with your financial advisor regularly. Plan a comprehensive appraisal of your mutual fund investments with your financial advisor at least once in three months. Armed with a thorough understanding of your financial goals and objectives, coupled with their understanding of financial products and markets, your advisor would be well positioned to bring suitable new investment opportunities to your attention. He can keep you abreast of changes to the investment and tax environment that may affect your plans, and recommend any necessary adjustments. So when you do make a change in your investment portfolio, there is a logical reason behind it. That way you will be sure your money is invested wisely every step of the way.

Offers customization with convenience

What does it take to develop a personalized investment program, monitor your investments and keep track of all the paperwork, too? More time than your busy schedule may allow. Your financial advisor offers a professional approach to your customized investment program that may not demand a lot of work or time on your part—and a level of knowledge and expertise that may be difficult for you to achieve on your own.

Your portfolio is more than just a list of Mutual Funds. It is your financial future. If you do not have the time or inclination to closely manage it, a well-chosen advisor can be a terrific ally in achieving long-term financial freedom.

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