Let us first tell you what a financial advisor does. A professional financial advisor gives you advice about what you should be doing with your money. Now, you must be thinking of how a financial advisor can tell you how you can utilize your money or how he/she can let you know where you should invest it. Don’t worry if you are feeling lost right now as we are going to tell you many things related to the financial advisor which will help you to clear your doubts.
A Financial Advisor’s Many Roles
A financial advisor helps you to plan out the strategy of how you will be using your money. Whether you will be spending it on buying something or investing it. Let’s imagine you are planning to retire in the next 20 years or want to send your child to a private university/college in the coming 10 years. To make your dream come true, proper financial management is crucial and only a professional adviser can help you out. You should always get in touch with the right financial advisor having the right license to accomplish your future goals. Let’s take an example of Singapore. In an expensive place like this, you need to have good financial planning in Singapore to achieve your future goals.
Your advisor will cover many aspects of finances along with you which will include the amount of money you should save, the types of accounts you need, the kinds of insurance you should have (including long-term care, term life, and disability) and many other things. Consider your financial advisor as an educator as they will be educating you about something that will be highly useful and beneficial for you. They will make you understand how you can accomplish your future goals. All the topics about financial investment will be covered if you will have a meeting with a financial advisor. In the beginning, your financial advisor might suggest you to simply save your funds and as your bank account will grow, they will tell you the next steps that might include things like insurance and tax.
The first step in the financial advisory process is to understand your own financial status. You can not plan your future goals without knowing what your financial position is today. Generally, a financial advisor will ask you to fill a detailed written questionnaire. You have to fill in with proper details as this will help your financial advisor to understand what is your current financial situation and what it might be in the future.
The Financial Questionnaire
The questionnaire is to get an idea about your assets, liabilities, income, and expenses. You will be telling your financial advisor about your financial background, current situation, and though that, they will predict the best solution for your good future. You will also be asked about your future plans that you have to mention. From there the professional will get to know what your future goals demand. Keeping it short, you will be telling all current and expected investments, pensions, gifts, and sources of income.
The questionnaire will also touch upon more subjective topics, like your risk tolerance and risk capacity. This plays an important role as it tells the advisor where and when your financial stability can be disturbed and we all know that this can be a big hurdle when it comes to achieving our future goals.
There are a few other topics that are discussed by the advisor with the client as they are critical financial management topics and those are insurance issues and your tax situation. Your advisor should have knowledge about your present estate plan (or lack thereof) and also other professionals on your planning team like accountants and lawyers. Once all the information is the exchange and your advisor knows all about you, both can start the planning together.
Creating The Financial Plan
Once you give all the detail and information about yourself, this will play a big part in creating your financial plan which will let you become financially more secure based on what you answered in the questionnaire. That is the reason the initial step of asking the question is so important. It summarizes your present financial situation and without knowing all of that, you can not expect your financial advisor to have a secured plan for yourself. Discussing your goals is very important because it lets your advisor create a suitable financial plan. Everyone has different financial status, security, and stability. So it is important to know what is yours. Another analysis section can also take place where you will be telling about your risk tolerance, estate-planning details, family situation, long-term care risk, etc.
On the bases of your future net with and future income at retirement, the financial plan is created which has both the best and the worst cases of your financial stability.
It is not just a matter of a single meet up with your advisor. Once you meet with him/her. It becomes a whole long journey with that professional. That’s why it is really important to choose the best one who can actually help you to sort your financial status and plan your journey of a better future. Independent financial advisors are actually a great option to go with as you will get complete and full attention.
It is only a good advisor who can plan a good strategy. It is common sense that you should save and invest. Anyone can tell you to do this but it is not easy to tell how to do it.
Taking the example of Singapore, you must be thinking why financial advisors are important in Singapore, right? People are having a good life and it is a developed nation. Well, financial planning is important for everyone and it doesn’t depend on where you live or where you are from. To secure your future, you should be financially secured. There are so many independent financial advisors in Singapore who can help you to plan your financially safe future.