Considering a Financial Advisor for Your Investments

By: Martin Lukac
Submitted: 2007-01-17 16:17:39
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When it comes to investing money in the stock market, most people assume that they must have a professional handle it for them. This works for many people, while others are able to do a perfect job on their own.

But you have to realize that a financial advisor is there to help you manage your investments. He can take your investment money and put it in a wise place. But the overall picture won't be served if you don't tell the advisor about your overall financial situation.

You will find that most financial advisors will ask you about your debt, your job stability, your insurance, your wills or trusts. They do this for a reason. They understand that your investments can't be optimized if you are at risk in some area. The management of finances doesn't just focus on the stocks you hold, but the entire picture.

For example, if you have $20,000 to invest, but owe $15,000 in credit card debt, a good advisor will tell you to pay off your debt first. They would advise you have good life insurance, disability insurance and personal liability insurance.

Your financial goals will also play a role in the investment of your money in the stock market. Are you looking to make money in the long run or rather quickly? What is your risk level? Are you willing to gamble or do you like to play it safe?

Look for an advisor to ask you about your retirement plans and your sources of income. She may ask about your goals and dreams, how much you spend each year, questions about your family and your must haves.

This gives a financial advisor the accurate picture of your finances. Remember, one can't just look at one category alone. Why invest your money and earn 10% over the long run when you are paying 18% in interest to a bank for credit card bills? You won't be making money, you will be losing it.

There are many different types of financial advisors out there. Some are more qualified than others. Some create a financial plan for you and that's it. Some help you implement the changes in your finances. Look for a certified financial planner professional that has a good reputation in your area. Take the time to interview and really consider if the person is someone you can open up to and trust.

Remember, when it comes to your investments, you are still the boss. Regardless of what an advisor think or knows, you still control your money. Don't just give all of your financial well being over to someone else. Do the research and know what is going on with your money. Ask that you are contacted before changes are made in your account. Ask that things be explained so that you understand them. Ask to know each and every commission.

When it comes to investments, some people really benefit from the advice of experts. Many of us simply do not have the time to manage all the details on our own. Look at your finances, your goals and your family in deciding whether or not to use a financial advisor to help manage your investments.

Martin Lukac represents www.RateEmpire.com, an Internet consumer banking marketplace. RateEmpire.com is a destination site of personal finance, investing, taxes and mortgage rates. RateEmpire.com provides mortgage guides and financial rates and information. RateEmpire.com also operates a financial portal #1 American Financial, found at www.1AmericanFinancial.com and San Diego loan portal www.LendingSanDiego.com

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