Financial Advisor Medford can help you with investment management, estate planning, debt repayment and insurance. You should always ask how an advisor is compensated, as some work on commission while others follow the fiduciary standard.
Once you find an advisor, they’ll put together a financial strategy that you can follow and adapt as your needs change.
Financial planning is the process of thoroughly assessing a client’s current financial status and objectives. It includes budgeting, saving, investing, reducing debt and preparing for life’s uncertainties. Financial planners are often the best-equipped professionals to help their clients with these goals, and their services can make a significant difference in their clients’ financial success.
Traditionally, investment management has been the primary way that advisors have added value for their clients. However, with the commoditization of investing (as evidenced by low-cost passive index funds), advisors have sought additional ways to add value, and comprehensive financial planning is an increasingly popular option.
A well-rounded financial plan allows advisors to create a roadmap that aligns with their clients’ long-term goals, while also addressing short-term needs such as paying down debt, building emergency savings and creating college funding plans for children. It also addresses big-picture goals such as wealth accumulation, tax planning and estate planning.
Financial planners have a wide range of skills that they can bring to their clients, including analyzing income and expenses, building a portfolio, managing risk and evaluating taxes. They are also adept at determining the right mix of investments, debt and cash flow to meet their clients’ goals and objectives.
Some of the most in-demand skills in financial planners are interpersonal, as they are responsible for building relationships with their clients. According to salary survey site PayScale, advisors who possess strong oral and written communication skills earn about 27% more than those with only basic communication skills.
Financial planning involves a thorough understanding of a client’s current financial situation, including their income, expenses, assets, liabilities and debts. It also includes an assessment of their investment preferences, risk tolerance and overall lifestyle. This is a critical part of the advisor-client relationship, and it helps the advisor provide appropriate recommendations to their clients.
Despite the many benefits of financial planning, it is important to recognize that a comprehensive plan can take a considerable amount of time and resources to produce. Additionally, a financial plan requires regular updates to ensure that it remains relevant and effective.
Investment Management
Investing money into assets like stocks and bonds can grow a client’s wealth. Financial advisors who specialize in investment management may manage an investment portfolio for a client, including purchasing and selling investments, creating short or long-term strategies, overseeing asset allocation and developing a tax strategy. Many investment managers also offer financial planning services to clients, giving them more holistic advice on topics such as cash-flow management, taxes, insurance and estate planning. This type of financial advisor is often referred to as a wealth manager.
For those looking to transition into a career in financial management, earning a bachelor’s degree and becoming a certified financial planner is a good starting point. Earning a master’s degree can further help you prepare for a career in the industry. You’ll need to pass the Series 65 exam if you plan on offering investment management services, and you should pursue a fiduciary duty designation, which requires that you work in your client’s best interest and make recommendations without compensation or bias.
Financial advisors who specialize in investment management may work with individuals, institutions, nonprofit organizations or retirement plans. Their duties may include managing investments in mutual funds, exchange-traded funds or real estate, as well as providing advice to clients on diversification and asset allocation. They may also be required to review the financial health of a client’s portfolio and address any issues that could arise, such as insolvency or bankruptcy.
While many people believe that financial advisors only serve the wealthy, investing money in a diversified portfolio can be a great way for anyone to increase their savings and build wealth. For those looking for an advisor, SmartAsset’s free tool matches you with up to three vetted advisors who can help you build a retirement plan, create an estate plan and choose life insurance policies.
If you prefer a more personal relationship, you can sign up for a financial advisory service that pairs you with a human financial advisor, and offers advice over the phone or internet. Some of these services provide access to a team of financial experts and cost less than traditional brick-and-mortar firms, with fees that start at 0.30% of your assets.
Tax Planning
Whether you are an experienced financial advisor or new to the industry, tax planning should be an integral part of your practice. Your clients will appreciate your expertise in this area, which can help them avoid costly mistakes and stay on the right side of the law.
A financial advisor’s role in tax planning focuses on minimizing investment tax liability. This may involve using various tactics to reduce the amount a client needs to pay the IRS, including deductions and credits. It also includes recommending strategies like tax-loss harvesting, tax-gain harvesting, asset location, and charitable giving, all of which are designed to improve the effectiveness of an investor’s investment portfolio.
Many financial professionals choose to specialize in one or more areas of financial planning. For example, a registered investment adviser (RIA) or Certified Financial Planner (CFP) is licensed to manage client investments and offer advice on retirement, estate, and financial planning issues. Both advisors are required to pass exams and meet other requirements to obtain their licenses. They typically earn compensation through an hourly fee, an annual fixed retainer, or a percentage of managed assets.
In addition to focusing on investment strategies, financial planners can also help clients plan for the future by assessing their current and projected spending habits, as well as determining their goals. This information can help them create a budget that maximizes opportunities while limiting risk.
As a result, financial planners can assist their clients with managing risk by reducing debt, saving for emergencies, and diversifying their savings. They can also provide guidance on insurance products, including life and disability coverage.
To become a financial advisor, you must have a bachelor’s degree or equivalent work experience and pass the Financial Industry Regulatory Authority (FINRA) exams to obtain your licensing. In some states, you must also complete a series of state exams to receive your license. You can check FINRA’s database to find out if an advisor is registered and licensed. Depending on your career path, you can become a certified financial planner (CFP) or a registered investment adviser (RIA). A CFP has a fiduciary duty to their clients and is held to higher ethical standards.
Estate Planning
Financial advisors typically provide holistic planning services, focusing on areas like investment management and retirement planning. They may also be able to offer assistance with estate planning, which can include writing a will and establishing trusts. Estate planning helps clients protect their assets and ensure that their wishes are carried out after death. It also allows them to avoid unnecessary taxes and fees. While many people assume that a simple will is enough to cover their estate planning needs, this is not always the case. An effective estate plan is much more comprehensive and can incorporate a variety of tools, including trusts, power of attorney, living wills and life insurance.
When it comes to estate planning, timing is important. Those who wait until the last minute risk leaving their loved ones to navigate the process on their own, which can result in costly errors. It is important to talk with a financial advisor about estate planning and make sure that you have an up-to-date plan in place.
A good estate plan should address a client’s goals and objectives, as well as their family situation. For example, if a client has children, they should name guardians for them in their wills and establish trusts to manage their assets until they are old enough to handle them on their own. They should also designate beneficiaries for their accounts and life insurance policies. It is a good idea to update these documents whenever there is a major life event, such as a divorce, marriage, birth or death.
Lastly, it is important for clients to consider their philanthropic goals and how they want their estate to be distributed after they die. Creating foundations, endowments and scholarships are some common ways that high-net-worth clients use their wealth to help others. An effective estate plan can also help clients minimize the risk of their assets being exposed to creditors, divorce or litigation.
A quality estate plan can be complex, but it is vital to protecting your hard-earned money and ensuring that your wishes are carried out after you die. A financial advisor can help you create an estate plan that will help you protect your investments and preserve funds for your loved ones.
