Why do you need a financial advisor for financial planning?
If you have asked yourself how to find a financial advisor for financial planning then you are on the right path! Managing your finances is tough; there are taxes to consider, investments to make, and assets to maintain.
And, a financial advisor can help you plan a sustainable financial map for your future and unique goals.
Investing and maximizing the value of your wealth is the ultimate goal. Every individual must take care of his or her finances to have a safe and comfortable retirement.
Financial advisors can help you with a retirement plan and on how to achieve financial goals like buying a house, or car, financing your child’s education, and the best asset classes to invest in.
Things to know before finding financial advisor for financial planning
Services offered by advisors and planners
According to a survey conducted by the National Association of Financial Planners, it has been estimated that only 30% of investors have a paid financial advisor.
Moreover, 57% of the total number of people prefer managing their own money. Also, 95% of people who have opted for financial advisors believe that it was a good decision to invest in them.
While evaluating a financial advisor, make sure that you got through the kinds of services and plans that they offer. It will be extremely helpful to manage all of your finances and financial habits about it.
Reasons to seek financial advice
A financial advisor can help you manage your money better. For example, perhaps you just received a considerable sum of money from a relative who died or a windfall from the state lottery.
Financial advisors can help you manage this money, and suggest some tax-saving investments to secure your funds and grow your wealth.
Financial advisors can help you meet different goals. For example, if you are blessed with a baby and you want to ensure that his or her future is completely secured, you would want to start saving and investing for him or her.
Whether it’s buying a bigger house for your child or building an education corpus, financial advisors can create a feasible plan to help you meet those needs.
The approach to investing at or during retirement is different from that of a young worker. As you near retirement, your risk tolerance level will change, and your investing style should change as well.
Discuss what you want to do in your retirement, where you want to settle, and the future costs of living with your advisor
Additional read: Importance of an optimistic mindset in mutual funds investments
Investment management
Financial planners or advisors are those people who help individuals and businesses to create a proper investment plan that helps them meet their agenda and goals.
For example, if you are looking for help in creating a savings plan for yourself, preparing investment strategies for your portfolio, paying off debts, and so on, a financial advisor could be of great help.
You can go for reputed or startup firms with professionals who have the proper knowledge and understanding of finance. These firms have individuals and teams who can be extremely helpful.
Additional read: Investment strategies in a volatile market
Understand the compensation of financial advisors
There are multiple ways that financial advisors can choose to charge for their services. Financial advisors focus on the most objective and unbiased thing which is their fee.
To hire a financial advisor who suits your needs, you should be knowing all the ways through which you can pay the financial advisor.
There are broadly two ways of compensation which are fee-only and non-fee only. As we can understand from the term, the fee-only advisor sticks to charging a fee for their work whereas the non-fee advisors go for other kickbacks and incentives for their services.
Financial advisors can help you understand your goals better and align your expenses to achieve them.
Consult an expert advisor to get the right plan
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What are Educases?
Educases are a bucket of mutual funds, which allows an investor to buy a bucket of mutual funds, which are predefined combinations of funds based on the calculated risk and returns parameters.
Why Educases are needed?
There are more than 4,500 mutual funds we have in the industry. But which fund will suit which type of investor based on the risk could be a difficult task. So, here in EduFund, we have a bucket of mutual funds for every investor, known as Educases.
Strategy behind Educases
A team of EduFund experts sits together and decides what will be the parameters of risk and returns to meet the objective.
Parameters like standard deviation, alpha, share ratio, returns, etc. Then, a report is run over 4,500 mutual funds to extract the top mutual funds based on different risks.
What if the fund is new? In that case, if the fund is active/passive, then we wait for some quarters to check its performance compared to the benchmark & its peers; and the fund's expense ratio. That's not all; we also look for other parameters.
And then, the past data of these educases are back-tested to check the volatility in returns and how the portfolio has performed under different market conditions.
We try to ensure that the portfolio should face less volatility than the market and should remain in sync with the risk and returns parameter. These educases are rebalanced to make the best fit for the risk. In the end, a monthly review is done on these educases.
For example, suppose the equity market is corrected by more than 15%. In that case, we try to ensure that your equity portfolio in the aggressive risk category should not be corrected by that much.
Advantages
Risk-oriented – These educases are designed to meet the investor's risk profile. For example, if you are young and you are planning for the long-term, then there is an aggressive risk educase is for you.
On-going monitoring – These educases are monitored on a regular basis so that it meets the risk and returns profile of the investor.
Auto rebalancing – These educases are auto-rebalanced. Suppose the risk of one fund in educase is increased by 15%, then the allocation of the educases having that fund will be rebalanced accordingly.
Well-diversified – Educases contain multiple mutual funds in one particular basket. So, having a well-diversified portfolio is one of the best quality of educases.
No cost – These educases are free for every investor to invest in. EduFund does not charge anything for these educases. So, you don't need to pay a single penny to invest in this educases.
How can you invest?
Download the EduFund app, fill in the basic details, and then the app will calculate your risk profile and the suggested amount for your desired target.
Then, you can go ahead and explore the funds or go to the section on Educases.
There you can see the suggested educases with the past performance of these educases including its holdings of mutual funds as per your risk profile.
Conclusion
If you are looking for a diversified mutual fund investment as per your risk profile, then Educase is the right choice for you.
Consult an expert advisor to get the right plan
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Why you should hire a financial advisor? All you need to know
There are enormous options available when it comes to investing, right from mutual funds to cryptocurrency. But which investment avenue is suited for you is different from other people.
Your risk appetite is different, you have different cash flows, and you have your own financial goals. All these vary from individual to individual.
Some investment options will help you provide regular income, some will help in capital protection, and some will help you generate wealth.
Which one is the right choice for you, is the question? Financial instruments will provide you with returns, but you also need to evaluate their risk. A financial advisor will guide you through all this evaluation and help you make the right choice.
Who is a financial advisor?
A financial advisor provides consultation or guidance on how, where, and when to invest. They will help you with the financial plan, strategy, how to save tax, etc.
Source: pexels
Why should you hire a financial advisor?
Now, you might think that why should you consider one, when there is plenty of knowledge available on the internet about investing because a financial advisor brings the right expertise in the financial market and the products available in the market.
Financial advisors have the right tools to evaluate different products based on certain conditions.
First, you need to ask these questions yourself:
Do you have adequate financial market knowledge?
Do you have expertise in financial products and instruments?
Do you have enough time to track, manage, evaluate and rebalance your portfolio?
Do you enjoy reading about finance topics like wealth management, derivatives, etc.?
Do you have the skills to research and evaluate financial instruments?
If you have answers to the above questions, you don’t need a financial advisor. But, if you don’t have the answers to these questions, you need a financial advisor.
Read more: A parent checklist to send a child abroad
Benefits of having a financial advisor
Financial expertise: A financial advisor undergo several training and certifications which help them gain knowledge about the financial world. So, having a financial advisor in your planning will help you build a portfolio for your needs and help you keep track of it.
Budgeting: A financial advisor helps you to create a budget so that your unwanted expenses can be minimized and you can save for your financial freedom.
Financial plan: A financial advisor will help you to create the right financial plan, which will help you to achieve your financial goal effectively and efficiently.
Investment strategy: A financial advisor will not only build a financial plan for you but also help you create investment strategies that will help you choose the right investment option for your targets with the right amount to invest in.
Regular monitoring: You might not have enough time to track your portfolio. Here comes the financial advisor to keep track of your portfolio. Regular portfolio monitoring is required so that the investment remains aligned with your financial goals.
Rebalancing of the portfolio: The portfolio requires rebalancing from time to time or depending on market conditions. There are situations when the selected investment option might underperform or outperform the expected required rate of returns; then, a rebalancing might also be needed in such situations. A financial advisor will help you to make the right choice.
Helps in tax savings: A financial advisor helps you consult or provide guidance on saving taxes by investing in different options.
Conclusion:
Having a financial advisor in your financial journey could help to manage your finances properly with better investment strategies.
Consult an expert advisor to get the right plan for you
TALK TO AN EXPERT
