Your investment goals are personal. They’re about taking care of your family, feeling secure, and being comfortable. And whether your goals include retirement planning, charitable giving, or transitioning wealth, selecting a professional advisor to help you is a critical decision for your financial future. You want to make sure you are getting real value. But how do you define the value of advice?
Here are three areas in which an advisor can add meaningful value:
- Behavioral Coaching – Investing evokes emotion (think March 2009), but your advisor can help you maintain a long-term perspective while tracking your progress towards your specific financial goals. Working with an objective professional can help you avoid the pitfalls associated with trying to time the markets.
- Portfolio Construction – Your advisor can help you build and maintain a portfolio with a suitable mix of broadly diversified stock and bond funds. How your assets are allocated is based using proper risk-profiling techniques, which includes not only your risk tolerance¹, but also your required risk² and capacity for risk³.
- Wealth Management – Managing your risk by periodically rebalancing your portfolio, identifying and addressing obstacles that could jeaprodize your plan, controlling expenses, and managing taxes to increase your after-tax returns.
¹ Risk tolerance – how an individual feels about taking risk.
² Required Risk – given your available resources how much return do you have to earn to reach your targets.
³ Risk Capacity – the extent to which your financial plan can withstand the impact of unexpected (negative) events.