Many investors are reluctant to pay for financial advice, but a good independent financial advisor (IFA) will use their knowledge and years of experience to help you make important decisions that fit your particular circumstances.
Investors are flooded with information and it can sometimes be quite a daunting experience to go at it alone. You might not always need or want an IFA, but they can often be the key factor in your financial success. Here are five scenarios where consulting an IFA would be beneficial to you:
You want to develop a financial plan, but you don’t know where to start
An IFA will help you identify your key goals and develop a long-term, objective driven plan. Always consider your long-term needs when making an investment. Retirement savings, education, healthcare costs and which investment company to invest in, can have a huge impact on your long-term plans. An IFA can shape these commitments into realistic goals and help you stay focused during uncertain times. Remember, you only change your plan if your goals or circumstances change.
Also Read: 7 Questions to When Choose Between a Financial Advisor and Robo-Advisor
You’re having trouble choosing the right investment product
The number of products available to investors is truly astounding. So much so that choice itself becomes a barrier to entry. It’s of the utmost importance that you understand the fine print of the products you are considering. Not all investment products will suit your objectives. Some have certain restrictions, while others offer tax benefits. Therefore it is important to be aware of the details before committing.
The sheer number of products can make research time consuming and it can often be overwhelming. An IFA can use their knowledge and experience to help you make choices that are suitable for your unique situation.
Your circumstances have, or will, change
Some life events change everything: Marriage, children, divorce, death in the family and retirement can introduce new challenges into your life. Managing your money during these life stages can be confusing and balancing responsibilities can be hard. Seeking financial advice can help you navigate through the confusion and questions, which arise during these huge changes.
Also Read: How Much Should I Have in my 401k?
You don’t know what to do with your retirement ‘windfall’ when changing jobs
It is important to preserve your retirement savings. People often withdraw their retirement savings when changing jobs, which can cause a setback in their retirement plans. When you withdraw your retirement savings you miss out on future compound interest and often end up spending the money. An IFA will help you stay on track with your long-term plan and curb any impulsive spending.
You have debt
You have to prioritize paying off your debt before making any investments. If you’re having a problem getting out of debt on your own, consult a debt counselor. They will help you develop a plan to tackle your debt. However, not all counselors are alike. You should only consult someone who is qualified and registered to offer counseling services.
Wrapping it up
It’s important that you take a cold hard look at your finances. This can be tough since many of us don’t want to face the reality of our financial situation. Critical self-evaluation is the vital first step to making sound long-term financial decisions. Ignorance of our financial situation can keep us from admitting we need professional help.
Investing on your own isn’t impossible, but for some, it can be tough. An IFA offers you objectivity and experience, which are invaluable assets when it comes to facing challenges and adhering to your plan.
