Whatever obstacles you encounter in life, your advisor can adapt your financial plan to help you overcome these challenges and remain on target to achieve your goals.
It’s no surprise that investors are typically better off financially – and are more likely to meet their long-term investment objectives – if they work with a financial advisor1. Advisors are trained to help clients achieve their goals. Part of an advisor’s expertise is building a financial plan that keeps clients focused on the long-term, yet maintains the flexibility to accommodate significant life changes.
Seven ways an advisor can provide value and keep you on course
An advisor can help you:
1. Stay disciplined with your plan
It can be tempting to deviate from your financial plan when markets become extremely volatile or personal circumstances potentially disrupt your ability to save and invest. Your advisor can instill discipline and confidence so you stay on the right track.
2. Understand current market events and explain how they may impact you
Economic and geopolitical issues can affect the performance of financial markets, which, in turn, may impact your investments (positively or negatively). Your advisor will help you make sense of world events and their effect on your portfolio, so you can keep market movements in perspective.
3. Position your portfolio when markets change
If markets rise dramatically or if a certain segment of the market significantly weakens, many investors are not sure what to do next or how to adjust their portfolio. Your advisor has the expertise to understand what has taken place, what the outlook is and whether your portfolio needs to be repositioned.
4. Adjust to life events that change your financial circumstances
If you experience a major change in your life such as marriage, a new child or a job loss, your advisor may need to adjust your financial plan to accommodate your new financial circumstances, while still working toward your long-term goals.
5. Plan and maintain a budget while considering all the implications
A good budget accounts for your current needs while minimizing unnecessary expenses. It also allocates money for investments that reflect your risk tolerance, while helping you achieve the growth required to meet your short- and long-term financial needs. Your advisor can create a budget that is realistic, comprehensive, sustainable and flexible enough for your changing circumstances.
6. Mitigate risk, even if it means sacrificing some returns
While everyone wants to maximize portfolio returns, your advisor also ensures that you are not taking on too much risk in an effort to achieve those returns. At times your gains may lag the market but your advisor has your risk tolerance and long-term objectives in mind.
7. Monitor your portfolio and rebalance as necessary
Portfolio allocations shift as markets move. If your portfolio is becoming too risky based on your investor profile or if it is no longer optimized to help you achieve your long-term objectives, your advisor can rebalance your portfolio so it can continue to meet your needs.
These are just seven of the many reasons why investors can benefit from working with a professional advisor. Whatever financial challenges you encounter in life, your advisor can adapt your plan to help you overcome these challenges and stay on course to meet your investment objectives.
1 Investment Funds Institute of Canada, 2014
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