Services

Why Clients Need the Services of a Financial Advisor

Who could have predicted the extent to which technological advances and the Internet have made e-trading so impactful on every retail investor’s investment activity? Trading companies have proliferated by making it accessible, affordable and user-friendly. Many of these same online trading companies have been aggressive in their television advertising.

One advertisement puts the actor in the role of a retail investor. While kibitzing with family members, he extols the virtues of online trading. As part of the message, the script takes direct aim at the full-service broker, with the investor complaining about the bother of dealing with a broker and paying commissions. Not only is the ad in poor taste and self-serving, but its message is misleading.

There is much more to managing money and creating wealth and secure retirements than just trading individual securities. A vast number of other factors, including knowledge, time, emotions and perspective, come into the investment process. With all these components in mind, it is easy to understand that online trading is not a panacea.

It is time that we state clearly why the investing public needs the services of professional advisors. Perhaps it is time for advisors to reiterate for clients the value of the big-picture process.

And perhaps it is also time that we respond to the e-trading companies of the world and tell the other side of the story, the side on which the professional advisor plays a vital and essential role in creating secure financial futures for clients. Whatever the current situation, the case for the professional financial advisor is compelling, one which deserves recognition, reaffirmation and reiteration.

The Following Are Eight Reasons to Find or Keep a Financial Advisor:

1. Advisors Provide an Integrated Financial Planning Approach
Personal financial success is achieved by constructing a well-developed plan. The financial planning process is carried out within the context of our clients’ needs and objectives. Factors integral to the successful plan include the clients’ financial goals, retirement objectives, risk tolerance, lifestyle ambitions, family educational needs and current and future savings capability. It considers the long-term benefits and implications of sheltering investment income from taxation, estate planning needs and options, the use of family trusts and the pervasive effects of making regular savings.

To adapt to changing conditions, plans need to be monitored, updated and revised on a regular basis. This process is the central role of the professional advisor. Most clients have neither the expertise, inclination nor discipline to engage in this process. Example: When was the last time you discussed your retirement needs with an online trading site?

2. Advisors Offer Perspective
One of the advisors’ major roles is to manage clients’ emotions, given the opportunity to invest on their own, most people let their decisions be driven by their emotions. They jump on bandwagons or sell when they should be buying. Often their reactions are knee-jerk in nature. The advisors’ role is to provide the sober second thought, the calm voice in the storm of uncertainty, the objective opinion at a time of subjectivity. Left to their own devices, history has shown that retail investors will act the wrong way at the wrong time. The advisors’ role is critical in managing emotional responses and providing prudent perspectives.

3. Advisors Offer a Multitude of Products
Wall Street and Bay Street create new, innovative and potentially rewarding products on an ongoing basis. These products offer investors new opportunities to reposition their investment portfolios for improved return, increased security or decreased effects of taxation. Part of the advisors’ role is to analyze these new opportunities and assess their applicability and value for each client. The access to new and creative investment alternatives makes the advisors’ role critical to the total picture.

4. Advisors Offer Professional Expertise
Industry standards and professional qualifications are improving all the time. A growing number of advisors are acquiring professional designations, and those designations themselves are becoming more stringent. With these increased qualifications comes the improved ability to assist clients in making the right investment choices. This professional expertise empowers advisors to counsel clients about the appropriate investment strategies that will produce long-term, positive results. Clients cannot obtain this knowledge, professional expertise and experience online. In markets dominated by professionals, it helps to be guided by professionals!

5. Advisors Save Clients Time
Managing an investment portfolio takes time. Most investors do not have the necessary time at their disposal to seek out new opportunities, do the research, assess suitability and monitor changing economic, market and corporate changes. Advisors do all of this for their clients. Completing a transaction online based on a hot tip or individual insight is only a minor part of the overall investment process. The complete process requires time, and in today’s world, time is a very precious commodity.

6. Advisors Are Backed by Resources
Advisors’ advice and input to clients is supported by a network of resources. The investment firms that the advisors are licensed through, the mutual fund companies that provide some of the products, the professional associations, other colleagues and personal research all form a resource package that supports the client.

7. Advisors Provide Client Contact
The investment process can be a lonely one, especially when corrections occur. Left to go it alone, retail investors can often feel isolated.

One of the most important services advisors provide is personal contact. Contacting clients to provide market updates, to offer advice during turbulent times, to explore new investment alternatives, to update corporate developments, to offer suggestions on when to sell or when to buy, to update portfolios or to respond to client concerns is essential and intricate to the process.

Online trading sites won’t call clients with a new idea, offer perspective in a time of uncertainty or show how new taxation laws have important investment implications – but financial advisors will.

8. Advisors Build Relationships
There is much more to building and managing wealth than crunching numbers. Consumers want and need professional financial advisors to understand their needs, to take a personal interest and to provide an ongoing relationship that helps them achieve their financial and personal goals.

Financial advisors are there to provide advice in the event of a family emergency. Advisors provide clients with access and introductions to other people who can also help them. Advisors realize that most clients have a family and with it, its own set of needs. Advisors can be an invaluable source of counseling and information should a sudden career change occur. When a person deals with a financial advisor, he is a client, not an account number.

Advisors are coaches that make sure that all the necessary elements are in place so that their clients can achieve their own personal financial goals-on time–with a sense of control and with peace of mind.

Please visit our Services section to learn more about what we can do for you!