Even though financial planning is an important part of everyone’s life, making a concrete financial plan is not everyone’s cup of tea. You may learn the basics of planning your financial goals and be able to manage your money to a certain extent, but for bigger goals that involve major savings and investments, you will always need the guidance of an expert, for instance, while choosing from different life insurance policies.

A lot of people may shun the idea of approaching a financial expert citing the expensive fees and the complicated financial jargon that financial consultants are known for. However, financial consultants always aim to simplify complicated terms for people and can help you choose the most suitable life insurance plans when you are in a fix!

Keeping that in mind, let’s know more about what financial advisors do and why their expertise is important for our financial planning.

Why Do You Need a Financial Consultant?

A financial advisor can either advise a company/organisation or an individual. Since financial consultants are experienced and know different types of saving and investment options, it would be safe to say that their advice can be relied upon. Especially when it comes to investments, a financial advisor’s role in helping you choose suitable investments for your portfolio cannot be ignored.

Since the financial industry is always growing and developing, financial advisors also make it a point to keep upgrading their knowledge base and seek out new investments that they can help others invest in.

These are some of the main benefits of seeking counsel from a financial advisor:

• A financial advisor is always well-informed, so they can help you make better investment decisions.
• They are professionals who offer financial planning services for a fee and so their advice will not be biased towards certain investments.
• Financial consultants help you learn about and explore different financial strategies that can boost your investments and savings.
• A money advisor can also help you plan your investments, keeping in mind the current and potential market trends.
• Good financial consultants introduce you to different investment options so that you can make an informed choice.
• They protect your investment portfolio from certain risks by suggesting asset allocations that are best suited for you.
• Experienced financial consultants can inform you of your investment risks with concrete figures and statistics.
  
  

Apart from knowing the financial industry and various investment options, financial advisors are also well-versed in taxation, the latest tax* regulations and implications, and can recommend investments and savings plans that can help you claim your tax* deductions under various sections of the Income Tax* Act.

Therefore, if you do not know which investments you should opt for, a financial advisor can prepare a plan for you so that not only do you get to grow your wealth but also save money through tax* benefits.

How to Choose a Financial Advisor?

It is important that you work with a financial consultant who knows how you can accomplish your financial goals. Their reputation is, therefore, extremely important. Many investors rely on word-of-mouth recommendations from other investors when it comes to approaching a financial consultant, and that works well. However, it is imperative that one should understand what type of advice is offered.

• Experience – It is true that the longer a consultant has been in the business, the more experienced they will be. Their credibility will also be influenced by the number of years they have been learning about the industry since the market and investments are dynamic and subject to constant changes. They can also help you understand if you need help with your long-term financial goals or short-term goals.
  
  
• Authenticity – It is also important that you do some research before you approach a financial advisor. For instance, there are many people who may not be qualified enough to offer financial advice but set up private practices to do so. Look up your financial advisor and know who they are before you approach them.
  
  
• Purpose – Like every other investor, you will also have to keep your financial goals clear. This will enable the financial advisor to pick out the most suitable investment options for you as per your future goals. They can also suggest how you can save taxes on your investments as per the latest tax* laws so that you can save some money even while investing.
  
  
• Fees and charges – As we know, financial consultants are professionals and will accept payment for offering their advice and services. Some of the advice they offer may be based on extensive research and analysis and can be quite expensive. Therefore, find out what you need financial advice for so that you do not end up paying expensive fees for financial advice you don’t need.
  
  

Many people also need the guidance of a financial consultant when buying life insurance plans. This is because even though life insurance is a necessity, it may not always be possible for people to understand the fine print. Tata AIA Life Insurance company offers a range of life insurance plans that you can choose from. If you need help and guidance choosing a life insurance policy, our online financial advisor will help you make a decision.

Conclusion

There are different types of financial advisors, and one may need to approach a financial advisor at least once in a while to get guidance on their investments and savings. Being knowledgeable professionals, financial advisors can help you choose investment options in the stock market, mutual funds, life insurance, and savings schemes and even explain the importance of tax* savings.

Getting all of this information from your financial advisor is important so that you can always make better investment decisions to save and invest your money more effectively.


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