The skills and knowledge of a financial advisor could significantly affect your financial situation.
An advisor can look at your financial standing holistically and comprehensively and will be able to take cognisance of a range of factors that you may not have considered, says Almo Lubowski, Technical Manager at the Financial Planning Institute.
Andrew Warren, Marketing Executive: Retail at Liberty Life, says that advisors have the ability to assess your needs and help you navigate the plethora of options, which can be quite daunting when assessed alone. “Planners understand your changing needs, so by engaging with a professional, you can properly plan for your future.”
Comprehensive profiles of your financial status are usually developed, which identify areas of strengths and weakness. Advisors can then offer product solutions which will address your specific needs. A good advisor can also assist in minimising taxes and potential estate taxes.
So often people are not aware or don’t fully understand each component of their financial plan. "A financial decision has possible tax implications, possible estate duty implications, or you may not have made certain connections between your personal income and the business you own,” says Lubowski. “There are always a myriad of impacts one decision can have and a financial advisor can guide you through those.”
A comprehensive financial plan should addresses your risk shortfalls (ensuring you and your family are covered in an unexpected event that requires additional capital or income), your retirement savings and any other investments you wish to make. Warren recommends liaising with your financial advisor at least once a year or when a life-changing event – such as marriage, having a child, death, receiving an inheritance or a change of job – occurs.
When choosing a planner, ensure that they are certified financial planners, as they subscribe to a strict code of conduct and are required to maintain their knowledge to ensure that consumers are given the best advice.