5 Reasons to Hire a Financial Advisor
If you believe much of the media, you hire a financial advisor to try to outperform the stock market. Never mind that this can have very little bearing on whether you can live or retire as you would like. Research has shown that even the brightest hedge fund managers struggle to outperform the markets.
Financial advisors can help:
- Press you to answer questions you don't want asked. How you plan to take care of your aging parents if you need to, whether your will is up to date, how you are going to send your kids to college, what you will do if you lose your job? These are the types of questions that make most of us too uncomfortable to ask ourselves.
- Put together a financial plan. Very few people ever do this on their own. And, most drag their feet on doing it with their financial advisor, too. It takes time and it can hurt. But, it matters.
- Identify risks in your portfolio that you might look past. An example would be investing mostly in tech stocks, when you're in the tech industry.
- Talk you through market volatility. Most of us claim we don't need this. It's hard to project forward an image of ourselves being nervous or scared. Another voice besides your own during tough markets can be invaluable.
- Identify your biases. This is a biggie. Many of us think we don't really have any...which is exactly the point. Biases can prevent you from sometimes making the best financial decisions.
Yes, financial advisors cost. But if they are able to provide the services above -- and particularly if they can do it earlier in one's investing life -- their value can be meaningful.