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Who are financial planners? How do they help people with their finances? What are their duties? Scroll down to find the answers.
Who Is A Financial Planner?
A financial planner refers to a professional who often assist people deal with their financial problems. He or she normally assists people in areas such as investment planning, financial planning, insurance, risk management and cash flow management among others. Personal financial planners are entrusted with the task that involves investment structure, portfolio and risk management and offering valuable guidance to people regarding suitability of the investments. Let’s now have a look at the other duties and responsibilities of financial planners.
What Do Financial Planners Do?
Here are a few of the many duties and responsibilities that financial planners normally do;
*Advising Clients On Best Investment Opportunities:-
A financial planner is usually responsible for assessing the market condition, compiling and analysing the socio-economic data as well as advising his or her client(s) on the available best investment opportunities. He or she is normally required to be comfortable with the insurance and tax laws and suggest the various suitable investment alternatives.
The planner also is expected to have the required knowledge of regulatory and legal requirements. Suggesting investments like mutual funds, bonds and stocks; suggesting contributions to personal retirement accounts and retirement planning among other services come also under purview of financial (planner) responsibilities.
*Creating As Well As Maintaining Their Individual Client Base:-
Financial planners essentially have got the task of creating and then maintaining their individual client base. Generally, client relationships often have got to be effectively forged by suggesting wealth creating and superior financial management strategies.
Meeting on regular basis with clients, effectively preparing and then delivering the presentations to the clients also are ideal since they may easily enable the planner to communicate the various benefits of some certain investments as well as the prudence of relegating others.
*Ability And Willingness Of Assuming Risks:-
A financial planner cannot in anyway ignore the client’s willingness and ability to assume risks. Generally, the willingness and the ability to undertake different risks coupled with appropriate investment decision making prowess definitely will effectively influence the client’s return on investments. This is due to the fact that that reward and risk are normally directly proportional. The clients who’ve got a great cash deal as well as a long-term investment horizon also may be better off investing in the more risky assets. Individuals with short term investment horizons require having enough liquidity in order to hassle free meet their different financial obligations. Thus, in such instances the planner is required to suggest the investments which have got a short term maturity.
Despite a person having the wealth generation capacity, he or she may decide not investing in what he feels is a very risky proposition. Generally, in such a situation, the planner should explain effectively to reluctant investors the concept of the reward and risk, clarify the needs for the liquidity as well as ensure that the time horizon of investor is matching the need for the liquidity.
Last but not the least; you should note that choosing a financial planner is a job which needs great deal of contemplation and thought, since the advice which is dispensed may ruin or secure your financial position.
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