The value of a financial adviser

Why use a financial adviser?

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When making legal decisions it’s common practice to consult with a lawyer, and when making tax-related decisions it’s common practice to consult with an accountant. However, when it comes to finances we often make decisions ourselves instead of consulting with a Financial Adviser. This is often because the value that a financial advisor can provide is not fully understood.

According to research from Financial Advice New Zealand, quality financial advice has given advised Kiwis the tools to think about their finances in a different way, giving them more control and greater confidence to make the decisions they need to make. Nearly 80% of Kiwis who have received financial advice say that the advice has helped improve their financial decision-making, helped them make decisions they wouldn’t otherwise have and given them greater peace of mind.

Here are just a few of the ways that a Financial Adviser can add value to your investing experience and help you achieve your financial objectives.

Tailored Advice

Financial advisers understand that everyone’s financial situation is unique. They can help you create a customised financial plan based on your current position, individual needs, goals, and your risk tolerance. They also understand that plans change. Financial Advisers will regularly check in to discuss any changes in your life that may have occurred and update your plan to ensure it stays relevant.

Experience and Expertise

Financial advisers have extensive training and experience in the financial industry – In New Zealand, Financial Advisers are required to be licensed and meet annual professional development requirements to ensure that they stay proficient and competent. As a result of their experience and expertise, they can help you make informed decisions based on their knowledge of the financial markets and financial products and services and help you avoid common mistakes that many self-managed investors make.

Improved Investment Performance

Financial advisers can help you identify opportunities for growth and can provide advice on how to create and manage a well-diversified investment portfolio. By working with a financial adviser, you may be able to achieve better and more stable investment returns than you would on your own. For example – close to 70% of advised Kiwis have reviewed most aspects of their KiwiSaver in the last 12 months, and those reviews resulted in changes for 72% of them, while Kiwis who are un-advised are less likely to do a review annually and are also less likely to change anything when they do review – with only 50% indicating they made a change the last time they reviewed their KiwiSaver.

Access to Professional Tools and Resources

Financial advisers have access to a wide array of professional tools and resources, including investment software and forecasting tools. They can use these to analyse your position in detail, use this analysis to help you make more informed decisions, and monitor your progress towards your financial goals once their advice has been implemented.

Stress Reduction

Dealing with finances can be a stressful and time-consuming task. Working with a financial adviser can help reduce the stress of financial planning by giving you certainty about your financial future as well as a trusted partner to guide you through the process. Almost half of advised Kiwis believe that as well as their finances, financial advice has benefitted their mental health, and 40% say their family life has benefitted too.

Long-Term Perspective

Financial advisers can help you think about your financial goals and objectives from a long-term perspective. They can help you understand the trade-offs between short-term and long-term financial decisions, and help you make decisions that are in your best interest and bring the most benefit over the long term.

Whether you’re just beginning your financial journey or you’re a seasoned investor, a financial adviser can guide you into making more informed decisions and help you achieve your financial objectives.

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