A financial advisor can provide holistic planning and investment help. They can meet with you in person or via video chat to discuss your finances, short and long-term goals, existing investments, and tolerance for investing risk.
Choosing the right advisor can make a significant difference in your financial future. You should check an advisor’s credentials and their fees.
Understanding Your Financial Goals
A reliable investment advisor like Frederick Baerenz can help you achieve your financial goals. They will start by understanding your financial situation and assessing your risk tolerance. They can then create a financial plan and recommend investments that align with your goals.
Your goals can range from short-term (one to three years) to long-term (retirement, funding a child’s college education, or giving to charity). To be successful, you need to make your goals specific, measurable, actionable, realistic, and time-bound.
When vetting investment advisor representatives, you should pay attention to their fees and fee structure. You can also use tools to learn more about their professional credentials and history. You should also check if they have a clean record with state securities regulators and the SEC. This will give you peace of mind that they can be trusted to act in your best interests. Some investment advisors charge a flat fee, while others earn commissions from product sales and charge an additional management fee.
Identifying Your Risk Tolerance
Risk tolerance is a specific factor in investing that determines how comfortable you feel with volatility and the potential for higher returns. A combination of factors, such as age, net worth and income, occupation, and family status, determines it.
It also takes into consideration your emotional resilience and level of knowledge. Your ability to remain invested during volatile periods can also impact your risk tolerance.
A risky investment strategy could be a great fit if you save for retirement and have plenty of time to ride out downturns. Still, it may not be a good idea if you have a mortgage, children in college, or elderly parents who depend on you financially.
How you come by your money is another factor, with some eschewing risk in one area of life but willing to take risks in other areas, such as skydiving or mountain climbing. An investment advisor like Fred Baerenz can help you identify your true risk tolerance and find investments matching your financial goals.
Creating a Financial Plan
An investment advisor works to create an investment strategy tailored to your goals, financial situation, and risk tolerance. Then, they develop a plan to grow wealth strategically over time.
Investors should consider partnering with an investment advisor who holds the certification of a registered investment adviser (RIA) or is licensed by their state securities regulator as an investment adviser representative (IAR). RIAs have fiduciary duties and must always act in your best interest. IARs, on the other hand, may earn commissions when they sell products to clients and can work as either a fee-only or fee-based adviser.
When vetting potential investment advisors, ask about their experience, education, and fees. You should also look for a fiduciary duty and be wary of conflicts of interest. For example, a fee-only adviser’s success is directly linked to the success of their client’s portfolio.
Investing
Investment advisor representatives offer advice about securities and manage clients’ investment portfolios as part of their role. They can also offer financial planning services if they have the proper license.
A good advisor will take the time to understand your long-term goals, risk tolerance, and current situation. Then, they’ll help you develop an investment plan that considers your specific needs and goals.
It’s important to remember that all investments carry some level of risk. The lower the risk, the less likely your investment will grow in value, and the more it may fluctuate.
Most investment advisers are held to fiduciary standards and must put their client’s interests before their own. However, looking into an adviser’s fee structure and other information is always a good idea before hiring one. A tool can provide a wealth of public disclosures to help you determine whether an investment advisor fits your financial needs.