3 Reasons You Should Break Up With Your Financial Advisor

The success of your financial life can often determine the quality of your actual life. Working with a financial advisor can help you establish a successful financial plan to achieve the goals you’ve set for yourself and your family.  

Because choosing a financial advisor can be tough, we’ve outlined some of the key benefits of working with effective financial planning services. With many things to think about, there are different types of financial advisors who can help you along your journey.  

Here are the key benefits of using a financial advisor: 

1. To protect your family

There are a myriad of life insurance products on the market; a financial advisor can tell you which ones are actually worth buying.

They will assess your position and guide you through the best options to protect yourself and your family – whether you are single or married, have a young family, or are approaching retirement.

2. To help plan your spending and saving

To secure your long term future, you need to build some assets – initially to get you through the rainy days and then to pay for holidays and luxuries.

Step one is to plan your spending so that you begin to save, and step two is to plan that saving so that you can build your wealth as efficiently as possible. Irrespective of amount, a financial advisor can look at your situation and find the best starting point for you.

3. To help you plan for retirement

Once your short term saving needs are covered, you can start thinking about the long term. Most people these days realise that they cannot rely on the state for more than the absolute basics.

Planning for retirement is a complex business, and there are many different options available. A financial advisor will not only help sift through the many rules and product options and help construct a portfolio to maximise your long term prospects.

4. To secure your house

The mortgage market is complicated, even more so in the aftermath of the increase in interest rates, with mortgages now even more complex and lenders’ requirements more stringent.

Buying a house is one of the most expensive decisions we make and the vast majority of us need a mortgage. A financial advisor could save you thousands, particularly at times like this. Not only can they seek out the best rates, they can help you assess sensible levels of borrowing, make the most of your deposit, and might also find lenders who would otherwise not be available to you.

5. To help you meet your investment goals

As you progress through life and your assets and income begin to increase, you can start considering how to enhance your position rather than simply consolidate it. This could mean anything from looking to retire early or paying college fees for your children. Whatever your goal, a financial advisor can help assess what is realistically possible and plan with you to help you achieve it.

6. To find the right combination of assets

Investment is as much about protecting against potential downsides as it is about targeting maximum growth. High returns are often associated with high risk and not everyone likes the idea that their investment might fall by a third or more overnight!

A financial advisor will make a detailed assessment of your attitude to risk before making recommendations. They will also ensure you don’t put all your eggs in one basket by helping you diversify not only across asset classes but also across accounts, individual funds and product providers.

7. To obtain an objective assessment

Every new investment opportunity or product is likely to be accompanied by a certain amount of hype but that doesn’t necessarily mean it is right for you. Investors will continue to be caught out by market ‘bubbles’ or high charges because they rush headfirst.

A financial advisor knows how products work in different markets and will identify possible downsides for you as well as the potential benefits, so that you can then make an informed decision about where to invest.

8. To save money

What is inflation?

Essentially inflation is the decline in value of a Currency ie € and the increase in price of good and services. A basic example of this is today you can buy 1 apple for €1 tomorrow it will cost you €2 to buy 1 apple. You now need to spend more euros to get the same product or service.  

RISE IN THE COST OF LIVING 

So why has the price of apples above increased? 

Price increases generally come from the manufacturer passing the increased cost of raw materials, wages, fuel etc over the customer.  

A second point worth noting, a surge in demand for goods and services will increase the price of the goods. A good example of this right now is the price of houses in Ireland.  Increasing demand and a shortage in supply results in higher prices as consumers are willing to pay more.  

How does it impact you negatively? 

As mentioned above inflation reduces the value of your money. So if you have €100 at home under the mattress or in a deposit account, today you can buy 100 apples. The following day as inflation increases the €100 you own now has devalued by half. You can only buy 50 apples with the same money.  

Holding money at home or in a low interest deposit account is bad for the consumer and your money.  

Are there any benefits to inflation? 

In one word absolutely. To some they see the sign of inflation as a struggling economy, while others see it as a time of potential prospering economy.  

As inflation erodes the value of cash, this is seen as an opportunity by some consumers to spend or invest money where it can hold or grow in value.  

When goods and services are in demand it has the potential to lower the rate of unemployment in an economy. As more people are working and have increasing disposable incomes they are more likely to spend. 

Lastly, inflation reduces the cost of borrowing. Referring back to the example above where if you borrowed €100 to buy 100 apples. With inflation as pay back the lender the next day the value of the €100 is worth less (50 apples) compared to when it was originally borrowed.