Do we need more than one financial advisor?
It’s not uncommon for people to use multiple advisors to manage their finances. For example, someone may have one advisor who invests their 401(k), another who helps them manage their real estate investments, and even one more to advise them on retirement planning. But is more always better? Here’s how people can decide if they need more than one financial advisor.
Is it a good idea to have more than one financial advisor?
Whether or not a person needs more than one financial advisor depends on a number of factors, including: The complexity of a person’s financial situation: a person with multiple businesses, rental properties, Whole life insurance policies in addition to or instead of a term life insurance policy, or other financial products may benefit from consulting several advisors. A well-coordinated team comprising an insurance advisor, an investment advisor and a lawyer can offer a variety of specialist knowledge and advice.
To what extent you trust your financial advisor: The advisor/financial advisor relationship is strongly based on trust. So, the decision of how many advisors to use can come down to how much one trusts their financial advisor(s) to make decisions in their best interests. Having a knowledgeable and trusted investment advisor can help a person seek out additional valuable support they may need in the form of a lawyer or CPA.
Benefits of having a single financial advisor
There are benefits to using a single financial advisor to oversee your money, including: The financial advisor is accountable: While having a team of reliable and talented advisors may seem like an ideal situation, having one person who understands the overall financial situation may also have advantages. A single financial advisor can provide a high level of continuity across their entire financial plan.
The individual’s portfolio can be more effectively balanced: Effective asset management means looking at the big picture to assess risk and ensure good diversification. A single advisor knows how assets are distributed among all financial accounts and can ensure that one is not too heavily weighted in one area.
How to Manage Multiple Financial Advisors
If a person’s financial situation requires hiring multiple financial advisors, they will need to know how to get the most out of them.
Coordinate efforts: The last thing you want is to pay multiple professionals to do the same job. Create a spreadsheet that outlines the types of tasks that financial advisors will perform and the aspects of your financial plan that they will be responsible for managing. This way, one can spot any overlap early on and ensure they get the most out of every advisor relationship.
Be transparent: It makes life a lot harder if advisors don’t know each other. Instead, individuals should fully disclose how their other assets are managed. This doesn’t mean they have to share their contact details if they don’t want to, but they will at least want to share the assets they have and the investment strategy so that each advisor can manage risk appropriately.
One may not need to consult several financial advisers for a simple financial situation. In fact, working with an advisor the person knows, likes, and trusts will often create the best experience. And ultimately, it will give you the satisfaction and peace of mind that your money is the number one priority.
Company Name: IQuanti, Inc.
Contact: Caroline Darbelles
E-mail: Send an email
Address:111 Town Square Pl, Suite 1201
City: City of Jersey
State: NJ 07310
Country: United States