When your car needs a tune up, you take it to a mechanic. So when you need a financial plan, why not work with a pro?
Financial advisors can help you with everything from creating a budget to planning for retirement. But according to the CFP Board, only 40 percent of Americans are using financial advisors. While a daily budget is just as important as the long term, planning for your future means making smart investments. A professional financial planner can help you make the right choices.
If you’ve ever thought about meeting with a financial advisor, then now is the time. If you’re on the fence, here are a few reasons you should.
A changing industry
In today’s financially-driven world, changes in regulation and technology are common. You can count on a financial advisor to explain what these developments mean for you.
An example would be the Department of Labor’s Fiduciary Rule, issued in 2017. “Anyone who uses a financial advisor for their retirement accounts is affected by this rule,” says Mark Dempsey, financial regulation expert at Navy Federal. “This regulation requires financial advisors to act in your best interest when advising you on your retirement accounts. You may think that’s always been the case, but it wasn’t,” he adds. So what does this mean for you?
Whether you’re rolling your TSP into a separate retirement account, or you’re simply getting advice on your 401(k) or IRA, you’ll want to work with someone who has your best interests in mind. Look to a financial advisor in these situations and don’t be afraid to talk through any rules or regulations. By doing so, you’ll know you’re working with someone you can trust.
Life is filled with milestones. Whether it’s moving to your next duty station, buying a home or starting a family, there’s a good chance your outlook on savings and investments will change over time.
With those milestones in mind, you may want to adjust your financial goals. “Any time you have a change in your financial situation it’s good to sit down with an advisor,” says Dempsey. “They can help build a plan to get you from where you are, to where you want to be.”
Meeting with an advisor as you go through different stages of life can be very beneficial. Some advisors even recommend quarterly or annual meetings with their clients. The more often you meet, the more financially prepared you’ll be for things like a down payment on a home or a child’s education costs.
The power of time
When it comes to investments, you’ll want time on your side.
Imagine a snowball rolling down a hill. The further it rolls, the larger it gets. The same concept can be applied to your money if you sock it away in an investment account. Time and regular contributions give you the best opportunity to grow your account, however returns aren’t guaranteed and investments can lose value. A financial advisor can recommend investments that give you the best chance of meeting your goals. Be transparent with your advisor about your current situation so they understand your goals, risk tolerance and timeframe.
Once you’re set up, keep track of your budget, accounts and overall plan. Your needs may change over time – or maybe the next set of regulations will open new doors for you. These are all great reasons to meet with a professional and get started toward your goals today.
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