In many businesses, the owners need to explain the positive reasons of why they should work for you. The value proposition needs to be well-established for people to be engaged. You may think you don’t need the help of a comprehensive financial planner, if your investment portfolio is growing and your finances are going well. After all, financial planners charge fees for their services, so you can save yourself that money by managing your wealth on your own.
There is a pre-conceived notion out there that working with a financial planner is simply invested related. That is so far from he truth. There are a lot more important considerations when looking at your finances. Its called life. It has so many intricate aspects in your financial affairs.
Its not that simple. Of course, financial planners don’t seem to think so. Sure, their services cost money, but the advice you get from a qualified professional can be worth its weight in gold. If you’re not using a financial planner, there are plenty of services you aren’t getting that you may not even know about. Here are some of the biggest unknown benefits they offer their clients.
Changing your financial behaviour
The behavioural aspect of financial planning is a lot more important than you might think. It’s not that people don’t know they should be investing regularly and thinking long-term, it’s more that they may not have the time or resources to find out which strategies will help them achieve financial success.
A financial planner will do an extensive discovery process to understand your history, your goals, and values. Then they can use this knowledge to help structure your financial plan and counsel you for optimal results.
Going a step further with clients, some financial planners have them take an assessment that helps them understand their financial perspectives and investment based on their attitudes about money. That assessment continues with a goal-mapping exercise to find out the specific things they want to accomplish, there financial life goals. These exercises help them figure out their financial and goal mindset.
If a financial planner understands you, your behaviour, and how you’re likely to react in any given situation, they can use that knowledge to help you dismiss your worst impulses and stay the course with your financial plan. They can even help you find ways to save more money, an important benefit if you’re not saving enough already.
Holding you accountable
A financial planner is a lot like hiring a personal trainer. Just as a personal trainer holds you accountable to your fitness goals, a financial planner holds you accountable for achieving your financial goals. If you’ve ever tried to reach a fitness goal, you know how hard it can be to get up early, get dressed, and get to the gym. But if you have someone there waiting for you, it makes things so much easier.
That added level of accountability can make all the difference whether you’re trying to grow wealth or work out more. Without someone to hold you accountable, however, it’s way too easy to push off your goals for another day.
Saving yourself time
Managing your own investment portfolio takes time, time that many people just don’t have. But if you truly want to manage your investments, you’ll need to use your time to map out a comprehensive financial plan, rebalance your investments regularly, figure out strategies to reduce your taxes, and create a realistic list of short-term and long-term goals. Oh, and don’t forget to formulate a plan to achieve them.
Financial planning is the main reason clients hire financial planners. Most clients are busy people, and they either lack the specific knowledge, time, discipline, or emotional bandwidth to research investments, plan for financial goals in the most tax-efficient ways, and follow through consistently.
One of the major pain points clients face is figuring out how to handle their savings because they just don’t know what to do with it or keep putting it off. They may even have a bunch of ideas about what they want to do financially, but aren’t sure how to prioritize.
Financial planners do the grunt work for their clients, helping them figure out what to do based on their individual financial situation. Their work ultimately saves those clients time, which they can use to do something they actually enjoy.
Learn what not to do
As I said earlier, most people think financial planning is mostly about getting advice on the different ways to invest your money. However, there’s something to be said for getting solid advice on pitfalls to avoid and having the benefit of learning from other people’s mistakes.
This is one reason financial planners are often worth their salt. They see a lot of stuff including financial decisions and investment choices that have turned out poorly over the years. When you handle your finances, you only get the benefit of seeing and experiencing the results of your own actions. While that experience can be valuable, you won’t know the financial consequences of some decisions you make today until further down the line.
Financial planners have the benefit of meeting with multiple clients every day and seeing how all their decisions, good and bad, have worked out in the end. They use that knowledge to give you an informed opinion on the right steps you should take financially, because they’ve seen the outcomes firsthand. That alone is worth paying for.
The focus of this article was to highlight some of the understated benefits of working with a financial planner. It should be considered when doing your own evaluation of selecting a financial advisor. Our focus is highly encompassing of the factors presented here. Our shared concept of financial life planning takes financial foresight beyond investments. It focuses on lifestyle and goals as a balancing factor. Balance in Keeping Life Current.