Investing For Beginners – Free Investment Articles and Tutorials

The key for mutual fund investors is to define and recognize value in professional financial advisor services, and then insist on getting that value. When you pay a sales charge or a fee, what can you expect a financial advisor to do for you? At a minimum, your financial advisor should:

• Understand your needs and help you formulate long-term investment goals and objectives. Before making specific recommendations, your advisor should try to gain a “whole picture” of your past experience, lifestyle and goals, as well your other investments and current financial situation. When will you retire, for example? Do you have life insurance? Do you own real estate? How secure is your job?
  
  
• Even if you feel competent to select investments, you may want to ask: Should I go it alone? Do I have the objectivity to see my opportunities and vulnerabilities? A professional financial advisor has this objectivity and can complement your own skills or strengths.
• Help you develop realistic expectations by discussing the risks and rewards of each investment. Every investment choice has strengths and weaknesses compared to alternatives, and you should never feel that you have only half the story. When you ask questions about risk, or have doubts about possible investment returns, you should expect your advisor to give you straight answers and help you develop a strategy that is both attainable and comfortable.
• Match your goals and objectives with appropriate mutual funds. You should expect your advisor to make clear and specific recommendations and explain the reasons behind them in terms you can understand. It goes without saying that the advisor should have confidence in the management of any mutual funds recommended, plus knowledge about their current portfolio strategies.
• Continually monitor your portfolio and help you evaluate performance. Your advisor can’t predict or influence a fund’s investment results, but he or she should discuss results with you in relation to each fund’s appropriate “benchmark” and help you judge your progress. In short, you should feel that you can always ask your advisor, “How’m I doing?”
• Conduct a regular review of your situation to ensure that your strategy stays current. One of the most valuable services your advisor can provide is to help you “stay the course” of your investment program. But “staying the course” long-term doesn’t necessarily mean staying put. Expect your advisor to work with you to adjust your asset allocation in response to any meaningful change in your lifestyle, priorities, assets or responsibilities—

  provide added current income, for instance, or modify your level of risk to make you feel more comfortable.

  These are the basic services that investors should expect from their financial advisors. Beyond the basics, though, many investors could use even more specialized assistance, like advice on retirement plan distribution options, setting up and servicing retirement plans for small businesses and self-employed individuals, developing tax-advantaged strategies for children’s college educations, insurance, estate, and trust planning, and year-end mutual fund tax advice. If you need specialized services, you should seek a financial advisor who offers them. Many do.

Related posts:

1. How You Pay An Advisor
2. Evaluate the Risk/Reward Tradeoff
3. Evaluate the Risk/Reward Tradeoff
4. How Should You Select a Financial Advisor?
5. Financial advisor for your investment strategy
6. Investment Advisor
7. Financial crisis have changed the relationship between clients and advisors
8. Method Two classes of Financial Advisory – Financial Consultant
9. Financial Resolutions for a good start … and finish the year better
10. Financial Management Course Worth More Than Credit