Money still doesn’t grow on trees, but financial advice certainly does. Today, we are awash with financial information.
Ironically, though, average adults in the U.S. aren’t as informed on good and bad financial practices as you might think.
According to the P-Fin Index, an annual survey developed by the TIAA Institute and the Global Financial Literacy Excellence Center, there is room for improvement when it comes to financial literacy. Their 2023 survey showed that “On average, U.S. adults correctly answered only 48% of the 28 index questions in 2023.”
Needless to say, the ambiguity created by a flood of financial information combined with weak financial literacy can be a real stumbling block to managing finances, mitigating risk, and achieving financial health.
So, who can help? Enter, financial advisors.
Financial advisors provide personalized guidance and expertise that helps individuals make informed financial decisions, manage their investments, plan for the future, and navigate more complex financial situations.
To learn more about how financial advisors help you figure out your finances, read on!
How Financial Advisors Help With Financial Planning
Hold on—what’s a financial plan?
First, your advisor can help you make a financial plan. A financial plan is a money roadmap that outlines where you are financially (income, expenses, debt, assets, etc.) and where you want to be.
How can financial advisors help?
Financial planners will help you evaluate your financial goals (or help you make some), taking into account your income, expenses, assets, and liabilities. Based on their assessment, they can create a personalized financial plan tailored to your needs. They can also assist you with budgeting and cash flow management.
Financial advisors help you plan for the future.
One of the most important services financial advisors provide is retirement planning. They’ll help you set goals around retirement and course correct if you need to. They can also offer valuable insights and assistance in education planning.
With their expertise, financial advisors empower you to make informed decisions and secure a brighter financial future.
How Financial Advisors Help With Investment Management
First, why get help with investment management?
Investing allows you to grow your wealth and potentially generate income beyond what can be achieved through traditional savings methods.
Whether or not someone achieves financial freedom may come down to how they manage their portfolio of investments. This is an area where financial advisors can be real game changers.
How do financial advisors help manage your investments?
Financial advisors can conduct portfolio analysis to help you assess the performance and composition of your investments, judge the risk and return profile of your portfolio, and make informed decisions about your asset allocation and investment strategies.
Your financial advisor will tailor their approach to your unique financial situation and risk tolerance. They’ll work closely with you to determine the optimal mix of investments that align with your goals.
How do financial advisors monitor growth and mitigate risk over time?
The stock market is volatile, as well as the value of other assets like your home. Your financial advisor understands the importance of managing risk effectively and helps you navigate potential pitfalls.
Additionally, financial advisors diligently monitor and rebalance your portfolios, ensuring that your investments remain aligned with your objectives over time.
How Financial Advisors Help With Taxes and Tax Planning
Wait, can you plan your taxes?
Yes. Tax planning refers to the process of strategically managing your financial affairs to optimize your tax liability. Doing your own taxes requires anywhere from some to quite a bit of knowledge of the tax code, which is available to the public.
How can a financial advisor help me with my taxes?
Your financial advisor can be a tremendous help in identifying tax-saving opportunities tailored to your unique circumstances.
They can ensure you take advantage of available deductions, credits, and incentives so that you’re not overpaying or loaning money unnecessarily to the government until you get your tax return.
By leveraging their knowledge of the tax code, they help maximize deductions and credits, potentially reducing your tax liability. Financial advisors also provide guidance on strategic tax planning for investments, suggesting tax-efficient investment strategies that can minimize the impact of taxes on your investment returns.
What about estate taxes?
Financial advisors can also help you manage the tax implications of estate planning. That is, helping you navigate estate tax considerations when planning how to transfer assets to your beneficiaries.
How Financial Advisors Help With Insurance Planning
Why get help choosing an insurance policy?
There are a lot of insurance plans out there and choosing the right one can be overwhelming. Financial advisors can help you evaluate your insurance needs and recommend suitable coverage.
With their knowledge and personalized recommendations, financial advisors empower you to make informed decisions, offering peace of mind and financial protection for the future.
How financial advisors can help you plan your life insurance.
One of the major forms of insurance financial planners can help with is life insurance. Financial advisors can help you determine the right coverage amount and policy type to ensure financial security for your beneficiaries in the event of death.
Disability and long-term care insurance.
Financial advisors help you choose a disability insurance that’s right for you, so you’re protected if you’re unable to work due to illness or injury. Further, they can provide expertise in long-term care insurance, so you’re prepared for potential long-term care and any associated costs.
How Financial Advisors Help You With Estate Planning
What does getting help with your estate planning look like?
Financial advisors assist with estate planning by creating/updating wills and trusts, minimizing estate taxes, ensuring smooth asset transfer, and providing charitable giving strategies. They help you document their wishes, legally bind them, and minimize tax implications on their estate.
How do financial advisors help you distribute your assets in the event of death?
Financial advisors guide individuals through the probate process or the process of distributing your assets to your beneficiaries after you die. They also help align philanthropic goals with the estate plan. With their expertise, financial advisors enable individuals to achieve their estate planning objectives and leave a legacy that reflects their values.
How Financial Advisors Support You With Business Planning
How can a financial advisor help me with my business?
Financial advisors play a pivotal role in business planning, providing comprehensive support throughout an entrepreneur’s journey. They assist with business formation and structure, ensuring legal and financial frameworks are properly established.
Can I hire a financial advisor to help facilitate changes to the business?
Absolutely. Financial advisors can help you develop business succession plans, facilitating a smooth transition of ownership and management.
What about growing my business? Can they help me there?
They can help with that too. Financial advisors provide valuable advice on business expansion and acquisitions, evaluating growth strategies and potential opportunities. Their expertise can help you make informed decisions, optimize business operations, and navigate the intricacies of business planning for long-term success.
Specialized Services Financial Planners Can Assist With
Financial advisors can address a wide range of unique financial needs beyond financial planning and investment management.
They assist with divorce financial planning, guiding individuals through the financial complexities of divorce.
Stock option planning is another area where they provide expertise, helping employees maximize the benefits of their stock options.
Financial advisors also offer trust services, advising on trust creation and management. In philanthropic planning, they help individuals align charitable goals with their financial plan.
Takeaways About Services Financial Planners Offer
In summary, financial advisors offer the following key services:
- Financial Planning: Creating personalized financial plans.
- Investment Management: Portfolio analysis and asset allocation.
- Tax Planning: Identifying tax-saving opportunities.
- Insurance Planning: Evaluating insurance needs.
- Estate Planning: Creating wills and trusts.
- Business Planning: Assisting with business formation.
These services provided by financial advisors are designed to help individuals make informed decisions, optimize their financial strategies, and work towards their financial goals with confidence.
If you have questions about your finances, take advantage of American Wealth Management’s 1-hour no-cost financial consultations. Submit this form to us and we will contact you to schedule a video call with one of our advisors.
American Wealth Management Reno, Nevada
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The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.
Investment advice offered through American Wealth Management (“AWM”), a SEC-registered investment adviser. Certain personnel of AWM may also be registered representatives of M.S. Howells & Co. (“MSH”), Member FINRA/SIPC, a registered broker-dealer, and therefore, may offer securities through MSH. AWM and MSH are not affiliated entities. M.S Howells does not provide tax or legal advice. Please consult your legal or tax advisor regarding your individual situation.
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1. Ameriprise.com, 2023.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.
Investment advice offered through American Wealth Management (“AWM”), a SEC-registered investment adviser. Certain personnel of AWM may also be registered representatives of M.S. Howells & Co. (“MSH”), Member FINRA/SIPC, a registered broker-dealer, and therefore, may offer securities through MSH. AWM and MSH are not affiliated entities. M.S Howells does not provide tax or legal advice. Please consult your legal or tax advisor regarding your individual situation.