What Do Financial Advisors Do? (A Helpful Guide in Plain English)

What Do Financial Advisors Do? (A Helpful Guide in Plain English)

July 31, 2021

If youve been managing your own wealth and crunching the numbers yourself, you might not know exactly what financial advisors do and how they can help you. Heres a quick guide.

Here at Marvel Wealth Management, we can help you solve for x. Find out more.

A Day in the Life of a Financial Advisor

In a nutshell, a financial advisor is a professional who specializes in helping people identify and work toward their financial goals. Generally speaking, their responsibilities will include:

  1. Meeting with clients to learn about their financial goals.
  2. Explaining different financial options that can help manage your wealth.
  3. Educating you about the risks and benefits to help you make a decision.
  4. Helping you plan for specific goals, such as education or retirement.
  5. Monitoring your accounts and recommending changes as necessary.
  6. Researching and recommending investment opportunities.
  7. Providing regular communication so you’re always up to date.

Financial advisors can help with many different aspects of wealth management. This includes saving, budgeting, managing debt, optimizing insurance, preparing for retirement, estate planning, and dealing with unexpected things like getting a large medical bill or receiving an inheritance.

The goal is twofold. First, financial advisors aim to give you confidence that your future will be secure. Second, they give you options so that you can enjoy the fruits of your hard work.

Why Its Worth Seeing a Financial Advisor

Different financial advisors specialize in different things. Here at Marvel Wealth Management, for example, we help aerospace and defense professionals prepare for retirement. 

Most of our clients are engineers, which means we know you can crunch your own data and run your own numbers. Were here to educate you about your options and help you reach smart decisions, which means speaking plain English and putting a plan in place that makes sense.

We can help you answer specific questions you have about your future, for example:

1. Do you want to pay off your home?

When it comes to paying off your home, for example, it might make sense to keep your mortgage and use cash for other investments. Debt isnt always a bad thing, especially if youre using it to purchase a wealth-building asset. It can create space in your plans to allow you to build wealth in other areas. It depends on your specific circumstances and financial goals, which is why its always important to obtain independent financial advice before making big decisions about your mortgage.

2. Do you want to grow your investment portfolio? 

There are lots of different ways to grow your investment portfolio. Property is a big one, but there are also stocks, bonds, mutual funds, ETFs, annuities, and many other avenues you can pursue. The exact combination that is right for you will depend on your financial goals, your personal values, how aggressive you want to be, how great your tolerance for risk, and many other factors. A financial advisor can help you sift through the options and provide a sounding board for your decisions.

3. Do you want to create additional income streams?

Additional income streams become especially important as you approach retirement. Once you retire, the goal is to get you to a position where you have a stable cashflow and you dont have to rely on a single source of income. With that in mind, its really important to have a plan when it comes to things like pensions, lump sum payments, or annuities. The best way to do that is to start early so you have plenty of time to make adjustments and seize new opportunities for growth. 

4. Do you want to pursue your investments and minimize risk?

Reducing risk is another important factor to consider before retirement. This could mean switching out aspects of your investment portfolio into less aggressive options that may provide more stable growth once you stop working. Its also important to get financial advice about insurance to ensure your investments are adequately protected. This is a highly individual decision that needs to take into consideration factors such as your comfort with risk and your financial resources.

The answers to these questions arent immediately obvious. Thats why a professional opinion can be so valuable. It takes the guesswork out of doing your own research and hoping for the best.

What Its Like to Work With a Financial Advisor

Every financial advisor is different, but our process has three simple steps:

  1. Sitting down with a financial advisor to talk about your financial goals. What kind of lifestyle do you want? What does your dream retirement actually look like? Once we identify this, we can work backward to figure out exactly how we’re going to work toward those dreams.
  2. What’s the current picture? What’s your current income? What are your assets and liabilities? Where are the opportunities for you to grow? This is where we crunch the numbers and create a detailed plan tailored to your personal circumstances.
  3. Building your portfolio. It’s important to know that this isn’t something you can do once and leave for 40 years until you’re ready to take a step back from work. It needs to be constantly monitored to ensure it holds up over time as the market ebbs and flows.

Its like Goldilocks. Everyones situation is slightly different, so we want to make sure we can put together the right portfolio to achieve your specific goals – not too hot, not too cold, just right. It may need to be adjusted over time, as new trends emerge or new opportunities present. 

Thats another advantage to working with a financial advisor. Were constantly researching new avenues for financial growth, such as new companies and investment opportunities we believe in. This significantly reduces the amount of time you need to spend researching on your own and second-guessing your decisions. Clarity is a valuable and often underrated asset.

Choosing the Right Financial Advisor

No-one is more qualified to make financial decisions on your behalf than you. However, if you want a professional opinion, you want to confirm youre on the right track, you want to learn about new strategies, or you want to spend less time researching and more time doing the things you love, its time to schedule a consultation with a wealth management firm and discuss your situation.

The most important thing in choosing a financial advisor is to select a firm that creates transparent and customized strategies according to your specific needs. You cant risk your financial well-being on a one-size-fits-all strategy. Financial advisors enter into an investment fiduciary relationship with you, which means we have a duty to act in good faith on your behalf. However, even with that in place, you need to make sure you work with someone you actually like and trust with your wealth.

Your financial advisor should always put your needs first, be flexible and adaptive to market cycles, and align with your financial goals so you can put long-term goals in place. Were here to support you with the tools and advice you need to make the best decisions possible so that you can take comfort in the fact that you have a plan in place for your future and that you can enjoy the quality of life youve earnt. 

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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All investing involves risk including loss of principal. No strategy assures success or protects against loss.