Wednesday, 23 January 2019

The Internet has made everything more democratic, including planning for our financial future.

Individuals can easily research personal finance strategies, buy and sell stocks online, and have a wealth of professional articles and advice available to inform their decisions. But even though all these resources are available at your fingertips, professional financial advisors can still play an important role for many investors.

While doing your own research and educating yourself to understand your money is empowering, a good financial advisor can give you the benefit of experience and insight with their guidance. If you've ever wondered whether your financial shape is the best it can be or how it might perform with professional help, it may be time to consider what an advisor could do for you.

Do you need a financial advisor?

Many investors do a good job planning, saving, and investing on their own, but there are some telltale signs that working with a financial advisor might be a good idea.

For instance, if you're not sure if you're saving enough money for retirement, an advisor can help. A professional financial planner can help you examine your current income, goals, life expectancy, tax rates, and other criteria and develop a personalized plan to help ensure you meet your retirement savings goals.

A financial advisor can also help those who don't know how much they're paying for their investments. Every investment—including your 401(k), mutual funds, and individual shares of stock—comes with fees. Those fees may include administrative expenses, management fees, front-end loads, back-end loads, and other unfamiliar costs.

If you aren't sure what you're paying for, you may be paying more than necessary. A financial planner can help sort through the small print and make sure you're getting an appropriate return on your investment.

Finally, if you don't have a solid strategy that includes how to manage risk and protect your capital during down markets, you may need the help of a financial planner. The market historically has ups and downs, and successful investors must have a plan for riding through both.

How to find a financial advisor

If you decide that a financial advisor may be helpful for you, choosing the right one can be overwhelming.

To narrow your choices, look for someone who holds the Certified Financial Planner (CFP) designation. This certification means that the advisor has completed all necessary requirements, including taking continuing education classes to stay informed about financial planning topics.

You should also consider the financial advisor's pay structure. If they're getting paid commission according to which funds or products you purchase, they may be tempted to steer you toward investments that may not best meet your needs. On the other hand, an advisor who is paid a flat fee or on an hourly basis is more likely to recommend the products that best fit your situation.

Before selecting a planner, review through the code of ethics they follow. Words like “fiduciary" will show that the advisor is required to recommend investments based on your best interest.

Reaping the benefits of professional planning

Working with a financial advisor can bring you—and your portfolio—valuable advantages. When you're facing life changes such as marriage, a new child, purchasing a home, or planning for college tuition, a financial advisor can help guide you to make smart decisions.

These days, few people work for the same company their entire careers and leave at age 62 with a pension or other fully-funded retirement plan. Instead, today's investors are much more responsible for cobbling together their own retirement funds—and it isn't easy. A professional financial advisor can help you maneuver the ropes of a changing financial environment and help ensure you'll be prepared for retirement.

A professional advisor can help you develop a strong financial strategy that will be realistic and flexible—and keep you motivated and focused as you work toward your financial goals.

For information about investment products and services available through BBVA Investments, please contact one of our professional advisors. 

The content provided is for informational purposes only. Neither BBVA USA, nor any of its affiliates, is providing legal, tax, or investment advice. You should consult your legal, tax, or financial advisor about your personal situation. Opinions expressed are those of the author(s) and do not necessarily represent the opinions of BBVA USA or any of its affiliates.

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