indicatorInvesting and Saving

Why do I need a financial advisor?

By Blair Holgate 27 October 2021 3 min read

The true benefit of working with an experienced financial advisor is the same as the one you would receive working with any experienced professional in their field. A financial advisor has built their life around knowing the market and helping their clients build diversified portfolios that bring them towards their financial or retirement goals. They have the education and knowledge, and are investing the time required to properly manage your investment portfolio.


Hire an advisor or DIY?

There are many ways to invest. You can go to a bank and invest with someone who also does banking, lending and sometimes insurance. You could also go to a brokerage firm, have someone come to your home or even invest using a trading platform online or robo-advisor. Any of these services will have extra charges attached because someone is providing you with advice and other services.

Many people believe that investing is easy and they can manage a portfolio themselves. How hard can it really be? The reality for most people is that a do-it-yourself (DIY) approach to investing will take a lot of time to do it really well. You must watch and adjust to different market conditions, rebalance your portfolio and constantly be researching different companies.

DIY investors also don't realize that when you’re investing, you’re also competing with the best and brightest minds in the global financial world. A person might be great at their job and know the ins and outs of their specific field, but they are not working closely enough with financial information on a daily basis to properly assess the risk of an investment decision. Financial advisors are close to it. They watch and study it daily and are able to make educated decisions on behalf of their clients to help them reach their financial goals. They have to take a number of courses and complete ongoing education requirements to stay up to date and best meet their clients’ needs.


The emotions of investing

Emotional impact plays a big role in DIY investing, especially in volatile markets. Helping you avoid big mistakes through emotional decision making could be one of the most important roles of a financial advisor. You might be comfortable with the fluctuations in value with your money at the time of an investment decision, but emotions can cause you to change your mind and drastically change your decisions when those fluctuations actually happen.

A financial advisor is there to guide you and help you make rational, educated decisions through these times. You can rely on them to guide your financial decision making process. Whether you want to save for a down payment on a house, pay for your child’s post-secondary education or secure a comfortable retirement, a financial advisor can put you in a more confident and prepared position to reach those goals.


How financial advisors can help you reach your goals

Financial advisors are equipped with training, education and experience that helps them support their clients savings and investing goals by advising on three critical variables: client contribution, time invested, and rate of return.

Client contribution: A financial advisor can help you find the money to save and invest from your current cash flow. They will help you look at spending patterns and determine whether current spending is truly in the areas that you value the most. This can help create clarity as to what needs to be changed.

Time invested: When it comes to investing, a shorter time frame requires more conservative solutions whereas longer time frames can allow for more assertive solutions, or more risk. One of the biggest DIY mistakes I see is people investing in short-term solutions to achieve a long-term goal, or investing in long-term solutions to meet a short-term goal. This can have a detrimental impact on their success. The main risk is that you can lose purchasing power to inflation or outlive your money by being too conservative. You need to give yourself a longer time horizon to be able to effectively deal with the impact of market risk.

Rate of return: The mix of investments ultimately determines the rate of return potential. For example: using cash and guaranteed investment certificates for shorter-term goals versus using bonds, stocks and real estate for mid-to longer-term goals.

skilled financial advisor is able to work with these three variables to create strategies that are efficient, effective and successful in achieving your goals. Not only will a financial advisor implement a strategy for you, they can help you stick to the plan with regular contact and reviews of your situation as it changes.​​​​​​​​​​​​​

ATB Wealth experts are ready to listen.

Whether you're a beginner or an experienced investor, we can help.

Chat now
ATB Virtual Assistant
The ATB Virtual Assistant doesn't support landscape mode. Please tilt your device vertically to portrait mode.