Why do I need a financial advisor? It’s a common question. You may already manage your finances on your own: saving when you can, investing in mutual funds or fixed deposits, being covered by a corporate health insurance plan, and contributing a small amount to retirement funds. So, if all your bases are covered, why pay someone else to do what you are already doing? To answer your question, we will outline five benefits of working with a financial advisor.
Who is a financial advisor?
We all want our money to work for us. It could mean buying a house in the next 10 years, taking annual vacations with family, taking care of loved ones, saving for your child’s education abroad, or enjoying a peaceful retirement. A financial advisor helps guide you toward those goals—they help turn your dreams into reality.
How do financial advisors do this? Through the right financial plan.
The financial planning process typically starts with understanding you: how you think about money and your current financial situation, including your income, expenses, investments, taxes, insurance, and liabilities.
The financial advisor then creates a personalised plan that includes clear and actionable steps to achieve your goals. In the end, you can achieve what you want without worrying about them all the time, because your financial advisor is doing the heavy lifting for you.
1. Unbiased advice: The fiduciary standard
When choosing a financial advisor, check whether their advice is unbiased or if they work on commission. If a financial advisor earns commissions, their recommendations may be biased toward the company offering that product rather than serving your best interests.
To ensure you receive conflict-free advice, look for a SEBI-registered Investment Adviser (RIA). According to the SEBI (Investment Advisers) Regulations, 2013, individuals or entities must be registered with the Securities and Exchange Board of India (SEBI) as investment advisers (IAs) to offer investment advice for a fee.
SEBI-registered investment advisers have a fiduciary responsibility; they are legally and ethically required to act in your best interest. They charge a fee directly to the client and cannot earn commissions on the products they recommend (under SEBI regulations).
2. Personalised financial planning built around your life
Financial planning isn’t a one-size-fits-all approach; it needs to be tailored to your individual situation. Your financial advisor will consider your financial personality, life stage, generational profile, and current financial status, including your investments, taxes, insurance, liabilities, and other factors. First, your advisor will assess your current financial situation. Then, they will discuss your needs and the milestones you want to achieve. Using this information, they will create a plan that helps you reach those goals. This plan will include guidance on managing expenses, selecting the right investments, and providing insurance coverage for you and your family, ensuring your expenses are managed effectively.
Unlike generic recommendations that may not fit everyone, a personalised financial plan is customised to meet your specific needs. This increases the likelihood that you will turn your financial goals into reality.
3. Holistic financial planning: The full picture
You may already have a Chartered Accountant for your income tax, an insurance agent for your insurance needs, and a bank relationship manager for your investments. While each of them manages their own area, no one looks at your financial planning as a whole. This can lead to different routes that don’t align. A financial advisor can help you manage your finances holistically. For instance, they can show you the best ways to invest to save on taxes and advise you on the most tax-efficient ways to withdraw those investments.
This is just one example, but there are many ways a financial advisor can assist you because they see the overall picture rather than just individual parts.
Holistic financial planning isn’t just a trend; it’s crucial for your financial well-being.
4. Preparing you for the unexpected
No matter how much you plan, life is filled with unexpected moments. While you can’t predict these events, you can prepare for them. Having a financial advisor means you are better equipped to handle the challenges that life may bring. These challenges could include job loss, a career change, property damage, a major injury, family illness, or even market dips.
A financial advisor can help you in two key ways. First, they can help you create a financial cushion to prepare for these situations. But their role doesn’t stop at just making a plan. When these situations arise, it’s natural to feel overwhelmed. You might become emotional and make quick decisions without thinking them through. A financial advisor is there to guide you through these tough times. Think of them as your personal crisis manager, offering the support you need to tackle challenges while keeping your goals in mind. They help you weather the storm and ensure you stay on track, no matter what life throws your way.
5. Your behavioural coach: Guarding your plan against impulsive decisions
Investing involves both psychology and math. One of the most important roles of a financial advisor is to act as a behavioral coach.
When markets become volatile or unexpected challenges arise, emotions like fear and anxiety can take over, leading to impulsive reactions that can disrupt years of careful planning. Your advisor offers the objectivity needed to remain calm when emotions run high.
By understanding your unique financial personality, they help you navigate market fluctuations without losing your peace of mind. At 1 Finance, we start financial planning with MoneySign®, the world’s only patented financial personality assessment. It helps us to understand how you think and feel about money, so we can guide you accordingly in your journey.
As your personal advisor, they keep you focused on your long-term goals, providing the steady guidance and disciplined perspective necessary to turn potential setbacks into manageable milestones.
Ready to work with a financial advisor?
You can handle your finances on your own, but a Qualified Financial Advisor offers valuable insights beyond just expertise. They understand your financial habits and can help align your choices with your personal milestones. With effective behavioral coaching and a comprehensive strategy, you can overcome financial stress and achieve clarity. If you’re looking for a trustworthy partnership that respects your unique journey, we are here to assist you. Book your free consultation.
