Do You Need A Financial Advisor?

If you do your own investing, have you ever wondered whether you should turn things over to a  financial advisor?

When the Time Comes

Professional advisors say there is no magic asset number that pushes an investor to seek advice. Rather, it is more likely an event that spooks a person and sends him scurrying through an advisor's door.

• The event typically involves either the receipt of or access to a large sum of money that the individual didn't have before.
• When you reach a point in which you're constantly afraid that you're going to make a mistake with your investments, then you need professional advice.
• Often, someone who has never spent or managed more than a few thousand rupees is looking at managing six figures . If this happens to someone just about to retire, the decisions that need to made are more critical, as there's a need to make this money last. 

Judging Yourself

The need for critical self-evaluation is vital when determining whether to hire a financial advisor. The following questions should help you sort it out:

• Do you have a fair knowledge of investments?
• Do you enjoy reading about wealth management and financial topics and researching specific assets?
• Do you have expertise in financial instruments? Do you have the time to monitor, evaluate them and make periodic changes to your portfolio?

If you answered "yes" to the above questions, you may not need an advisor or financial planner. But if you thought "no"....

The Wrong Advisor

If your advisor only records some transactions from time to time but never sits down and discusses long-term goals with you, you may want to look for a new advisor. Similarly, if your advisor never writes an investment plan or strategy to lay out your needs and aims and assess whether they are being reached, you may be better served elsewhere.

A written plan for each client is critical.  In addition, good advisors  have semiannual conferences with clients and talk to their clients on a regular basis. In addition, a good advisor who is just beginning to work with a client should never recommend a product until he has learned a lot about circumstances and goals.

Finally, the individual should ensure that any financial professional has the proper credentials. Avoid any advisor who is little more than a broker or a distributor but calls himself a financial planner or advisor.

The Bottom Line

The decision about whether to seek advice can be critical. If you do choose to seek advice, carefully choose the right professional for the job, and you should be on your way to a better financial plan. If you decide to go it alone, remember if at first you don't succeed, you can try again ... or call an advisor.