Chartered Financial Planners

What is a Financial Advisor?

Posted By on January 20th, 2021 in Blog, Financial Advisor

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A financial advisor helps you manage your money and make strategic choices for your future, they are your financial planning partner. For example, you may decide you want to retire by 50, or you may want to send your child to a private university in 10 years. To accomplish these goals, you will need to seek the advice of a professional who has the right licenses and experience to make these plans a reality. Together, you and your financial advisor will talk through many topics including the amount of money you should save, the types of bank accounts you need and how to plan your tax.

Your financial advisor is also an educator, part of their task is to help you understand what you need to do to achieve your future goals. At the start of your relationship with them they will help you understand budgeting and saving, and as you progress the financial advisor will assist you in understanding complex investments, insurance and tax matters.

Understanding Your Financial Health

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A financial advisor will work with you to get a full picture of your assets, liabilities, expenses and incomes. They will often ask you to undertake a financial health questionnaire, on the questionnaire you will fill in information about future pensions, income sources, retirement needs and any long-term financial obligations that you have. The questionnaire will also touch on subjective topics such as your risk tolerance and capacity.

Creating a Financial Plan

All the information your financial advisor has gathered and learned about you is collated into a comprehensive financial plan, this serves as a road map for your financial future. It will open with a summary of your financial situation including your net worth and liquid or working capital, as discussed in your questionnaire.

Based on your net worth and your goals the plan will create simulations of potentially best- and worst-case scenarios. These will take into account your retirement goals and reasonable rates of withdrawal, as well as your relationship or marital status a long with any goals you have for your children. After you review the plan the financial advisor can adjust it as necessary and then you are ready for action and can get on track to your financial goals.


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