EduFund Blogs

Who is a financial advisor? When should you hire a financial advisor? 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 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 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. Start Investing with the help of financial advisor 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. 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. FAQs Is it a good idea to hire a financial advisor? Hiring a financial advisor can be beneficial if you lack expertise in managing investments, taxes, and financial planning. They can provide personalized guidance and help you make informed decisions. However, research their credentials, fees, and services to ensure a suitable fit for your financial goals and situation. Is 1.5% fee high for a financial advisor? A 1.5% fee for a financial advisor is relatively high and could impact on your investment returns over time. It's important to compare fees and services, considering the advisor's expertise and the potential benefits they offer before deciding. What financial advisors don’t tell you? Financial advisors might not always emphasize the potential conflicts of interest tied to certain investment products, the impact of taxes on returns, or the fact that no investment is entirely risk-free. Additionally, they might not discuss the long-term impact of fees on your portfolio or the limitations of their own expertise. TALK TO AN EXPERT

To find out if a professional is a suitable fit for you when you're looking for someone to manage your money, you should ask them certain questions. You may make an informed choice if you are aware of an advisor's experience, area of specialization, and typical client age range.  Integrity is possibly the most important quality a financial counselor can have. In addition to managing your personal and family savings, they will also have access to and knowledge of your most private data. This is why it's crucial to choose a reliable employee.  You'll have concerns about how your money is being managed by your financial advisor, as well as how you can spend, save, and invest intelligently, even after you've found one you can trust.  Discover the most crucial inquiries to make at your yearly or quarterly sessions with your advisor. Let’s find out some questions you should be asking your financial advisor in the first meeting. Interview questions to ask prior to hiring  An interview can help you determine whether you are a good fit with a financial advisor who has your best interests in mind by giving you an idea of their experience and potential working relationship. 1. What do you qualify for?  The advisor's credentials and position as a professional are the first things you'll want to find out. No two financial advisors are alike because there are so many different certifications available. It is best to find an advisor whose profession is customized to your particular aims because one may focus on a different area or expertise than the other.  2. Describe your payment structure Secondly, learn the fee schedule the financial advisor will use to cover costs. As an illustration, some advisors charge a flat cost and never accept commissions, whilst others may do both.  The following are typical payment strategies used by financial advisors:  Fee-only: never charges a commission, simply an hourly or set amount for specific services receives commissions for recommending products like insurance and annuities.  Fee-based: mostly collects fees for services while also taking commissions. Charges are made based on the percentage of your assets that are under management (AUM).  3. How will we cooperate?  You'll also want to ask how the relationship will function. Will you meet with your financial counselor, for instance, every year or every three months? Will they be available on weekends and virtually? It's crucial to understand their preferred mode of contact, how they intend to meet with you, and any preferences they may have for scheduling meetings.  4. What investing Philosophy Do You Adopt?  A qualified advisor understands how to deal with your level of risk tolerance and helps you navigate unforeseen obstacles, like inflation or a recession. Inquire about the procedures and data-driven approaches they have in place for circumstances like this.  5. Do you owe fiduciary owes?  Fiduciaries must always behave in their client's best interests, even when doing so is not in their own best interests. Examples of fiduciaries include banks and law firms. Before choosing to hire a financial advisor, it's critical to understand whether they are held to the fiduciary standard as not all financial advisors are or are required to be.  6. Do You Collaborate with Lawyers?  You might require a tax attorney in addition to a financial counselor if your financial position is more complicated and involves company or estate planning. Thus, an advisor who is willing to work with an attorney or who can recommend one to you can help you identify the best candidates.  7. Will you agree to sign a contract outlining your compensation?  In any case, before you work with them, a fee-only planner should feel at ease discussing and signing an agreement outlining the compensation and services that will be offered.  8. May I speak to some of your former or present clients?  Financial advisors ought to be at ease providing you with references of customers whose money they have handled. If they're not, this might be a red flag.  These are some of the best questions to ask your financial advisor before you start working with them!  

When it comes to managing your finances, seeking the guidance of a financial advisor can be an excellent step toward achieving your long-term financial goals. However, for young adults who are just starting their financial journey, finding a trustworthy and reliable financial advisor can be a daunting task.  In this guide, we will discuss the importance of finding a financial advisor for young adults, the steps involved in finding a financial advisor, and how to choose the right financial advisor who can provide you with personalized financial advice to help you achieve your financial goals. So, whether you're a recent college graduate or a young professional looking to secure your financial future, this guide will provide you with valuable insights on finding the right financial advisor. Taking care of your finances  You may be aware of how challenging and crucial saving, investing, maximizing the value of your wealth, and retirement planning may be. If so, you may have thought about how to choose a financial advisor and the reasons you might require one.  You might have also experienced stress related to making a significant financial choice. You may have questioned how a financial advisor could assist with a home purchase, an investment in higher education, or managing the money for a wedding, the birth of a child, a divorce, the death of a spouse, or a serious illness.  Services of planners and advisors  Just 30% of investors, according to the National Association of Financial Planners, have a compensated financial advisor. While 95% of those who have an advisor say they think the advice is worth the money, 57% of those without one say they prefer to manage their own finances.  So, what services do financial planners and advisors offer? They may generally assist you in managing your financial life by employing different products and tactics to manage your wealth and enhance your financial practices.  Why you should get Financial advice?  For a variety of reasons, you could require a competent financial counselor. For instance, you might have recently received a sizeable inheritance from a deceased relative or a windfall from the state lottery. A person's need for a financial expert will change as they progress through different periods of life.  Maybe you recently had a child and want to secure their future in the event that the worst happens. Many parents look for assistance in building up estates that can pass riches to future generations and investing in their children's college educations. Retirement-related investing requires a different strategy than it does for young workers. Your degree of risk tolerance will alter as you get closer to retirement, and your investing strategy should adapt along with it. Perhaps your employer is providing an early retirement package that is too tempting to pass up, and you want to make sure the money will endure. Any of these circumstances (among many more) can naturally make you want some help from a professional managing your finances.  Finding reliable financial assistance  What steps should you take to discover the ideal advisor? Identifying the type of financial assistance, you require from a professional is the first step. Like many other individuals, you do some of your most profound economic thinking around tax time. So, a good certified public accountant (CPA) should be able to handle tax guidance and preparation for you. A financial advisor may or may not also be that CPA.  Choose the area of your financial life where assistance is needed The greatest financial planners are those who can help you map out a strategy for all your financial needs, including investment guidance, debt reduction, product recommendations for insurance, and estate preparation. Depending on the business, you might want in-depth financial planning or extra help for those with complicated financial needs. The services that different sorts of financial advisors provide may not be the same, so it's critical to choose the ones that you require.  Different types of Financial Advisors  Although all financial advisors are expected by law to act in your best interests, not all of them do. Understanding fiduciary duty and how they make money is crucial because it enables you to decide whether their advice is better for you or for their pockets. You must carefully assess potential financial advisors to ensure they are good for you and your money because there is no federal legislation that governs who can call themselves a financial advisor or provide financial advice.  Financial advisers who charge a fee  Fee-only financial advisors get their money from the fees you pay for their services. These fees could be calculated as a flat amount, an hourly rate, or a percentage of the assets they oversee managing on your behalf.  Almost all fee-only advisors are fiduciaries. To reduce any potential conflicts of interest, they have generally chosen to work just for pay. As they depend on consumers for their revenue, it is in their best interest to make sure you end up with financial plans and solutions that are ideal for you.  Financial Consultants with commissions  Financial advisors may advertise themselves as "free" or charge fees for guidance, and they may gain or lose money from third-party sales commissions. Commission-only advisors are fiduciaries who represent brokerage firms that provide investments and insurance, and they are solely subject to suitability requirements. The fiduciary duty of the financial advisor has an impact on fee-based financial advisors. Although not always negative in and of itself, some financial products are promoted using a commission-based approach. The use of financial advisors can be a terrific way to buy financial products, but it's important to know the difference between commission-based and fee-based financial advice.  Investors who are registered advisers  Investors who are registered advisers are professionals who are authorized to provide investment advice to clients. These individuals or firms must register with regulatory bodies such as the Securities and Exchange Commission (SEC) or state securities authorities to ensure compliance with securities laws and regulations. What are the services a financial advisor can offer?  Financial advice: By examining numerous investment options, financial advisors hope to assist you in selecting investments that are within your preferred level of risk.  Handling debt: If you owe money on credit card debt, school loans, auto loans, or mortgages, financial counselors can help you create a repayment plan.  Budgeting: Financial advisors are experts at assessing where your money goes once it has left your paycheck. To prepare for achieving your financial goals, advisors can help you create budgets.  Insurance coverage: Based on your financial situation, financial advisors could examine your current policies to identify any coverage gaps or recommend new types of policies, such as disability insurance or long-term care coverage.  Tax preparation: While planning your taxes, you should consider ways to reduce the amount of taxes you might owe, such as making sizeable charitable contributions or taking advantage of tax losses. Remember that tax preparation and planning are two distinct processes and that not all financial planners have a comprehensive grasp of taxes. You'll likely still want a CPA or tax preparation software to file your taxes.  Getting ready for retirement: With the help of financial professionals, you can fund your ultimate long-term goal of retiring. They can then make sure that you can protect your money once you have retired or are about to retire.  Estate planning: If you want to leave a legacy, financial advisors can help you transfer your assets to the next generation for your family, your friends, or charitable organizations.  College preparation: If you want to pay for your family members' higher education, financial advisors can help you design a strategy to help you save money.  Determine your capacity to pay your Financial Advisor  As an individual seeking financial advice, it is important to understand the various pricing structures that financial advisors may offer. Commission-only advisors may appear to be free, but they may receive compensation based on investments or purchases they make on your behalf. Fee-only or fee-based advisors may charge by the hour, plan, retainer agreement, or subscription model, in addition to fees based on the assets they manage for you.  When searching for a financial advisor, it is important to conduct extensive due diligence. You can ask for recommendations from peers, family, and friends, or search online for financial advisors. Professional financial planning associations also offer free databases of financial advisors.  As you assess potential advisors, consider their credentials, background, and fee schedules. It is important to note that not all financial planning association members are fiduciary financial counselors, so it is important to verify their status.  Ultimately, choosing the right financial advisor can help you achieve your financial goals and secure the future for yourself and your loved ones. However, due to the industry's complexity and potential for conflicts of interest, it is crucial to take precautions and select an advisor who will prioritize your financial needs.  Consult an expert advisor to get the right plan TALK TO AN EXPERT

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 TALK TO AN EXPERT

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 TALK TO AN EXPERT