What to Expect from Financial Planning Services in Kitchener
Have you recently looked into financial planning services in Kitchener? If you have, you likely have some questions before getting started. We all know a financial planner’s job is to help you maintain and grow your finances, but do you know exactly how they do it and how it works? What should you expect when working with a financial advisor in your area? At Grand River Financial Solutions, we’ve worked with a diverse set of clients to build a financial strategy that aligns with their aspirations. Today, we’ll be giving you an in-depth look at how the financial planning process works once you become a client. Want to learn what you can expect when you hire a financial advisor? Keep reading to find out!
Personalized Financial Strategies
During your first consultation, your financial planner will ask you why you’ve sought out their services and what your short-term and long-term goals are. Short-term goals are goals you expect to achieve within 1-4 years, while long-term goals take a longer and varying amount of time to be achieved. To be long-term, the goal should take 5 years or more to be met. Here are some common goals our clients have:
Short-Term Goals:
Establish an emergency fund.
Save for a vacation.
Pay off credit card debt.
Buy a car.
Long-Term Goals:
Retire early.
Pay off the mortgage.
Start a business.
No matter what your goal is, a financial advisor’s job is to devise and track a personalized financial plan that will help you reach that milestone. They’ll assess your current income and necessary expenses to manage your cash flow realistically and reliably. This will likely involve making budget recommendations that will better serve your financial goals.
An important thing to note is that this strategy will not always be the same. As your life and circumstances change, your financial planner will adjust your strategy to best suit your current financial status. For example, if you get a promotion at your job and begin making more money, your financial plan will be adjusted to align with your new income.
Comprehensive Financial Advice
Your financial advisor will act as a valuable resource, providing you with a wealth of information about how to manage various aspects of your finances. This goes beyond just simple budgeting recommendations, it also involves insightful financial projections, insurance planning, tax planning, and investment advice. Additionally, they have expansive knowledge on what Kitchener’s market and economy looks like currently and how it could look in the future. What’s great about this is that this knowledge can help enhance your own financial literacy.
How Financial Advisors Share Valuable Financial Advice
When you start working with a financial advisor, they consider the point you're at in life – whether you’re close to retirement, a recent college graduate, or newly established business owner. They do this because the stage you’re at in your life is an important indicator of what your financial needs might be.
At GRFS, we use a life roadmap that indicates where you’re at currently and where you could be in the future. It’s these insights which give us the ability to make thoughtful recommendations without you needing to ask us. For example, if you’re a recently married working individual, we’ll proactively give you advice and resources to put you on the path toward purchasing your first home.
Financial Projections in Financial Planning
Most advisors use financial planning software that provides them with personalized financial projections. These projections are essential, as they give you an idea of what your finances will look like in the future by following your financial plan. It gives you detailed insights into your savings accumulated over time and whether these savings will meet your expectations. Don’t worry, the numbers you see in these projections account for your regular expenses as well as growing inflation.
Expert Guidance on Investment Opportunities
As we mentioned briefly earlier, one of the services financial advisors are best known for providing is investment advice. What makes this aspect of a financial advisor’s service so popular and well-known? It’s because investing is extremely complicated. Although the benefits of investing throughout your life are widely known, it’s not a beginner-friendly venture, and very intimidating to newcomers. It can take years of education and experience to start consistently making effective investing decisions.
A financial advisor is key in streamlining this process. They have the years of investing knowledge and experience that you’d need to succeed, saving you the time, energy, and potentially money it’d take to acquire the same skillset.
What Investing Advice from a Financial Advisor Looks Like
Assessing Risk Tolerance
Your risk tolerance indicates how willing you are to take a risk on your investment journey, with the knowledge that that risk could result in a loss.
At first, you may think “why would I ever want to take a loss?” Well, winning and losing is the name of the game when it comes to investing! When you buy high-risk stocks, it’s a simple fact that you might end up in a loss, but there’s an equal or greater chance that the value of that stock will rise substantially. When you close the door to potential losses, you also are closing the door to major wins that could grow your finances exponentially.
Your risk tolerance will be determined through your financial situation as well as your personal comfort level. Your financial advisor will help you figure out what your personal comfort level is if you’re unsure.
Asset Allocation Plan
Once you’ve decided on a risk level, your financial advisor will draft up an asset allocation plan. An asset allocation plan will make recommendations about how to divide your investment portfolio across different asset classes (stocks, bonds, real estate.etc). This plan will ensure a diversified portfolio across asset classes, sectors, and geographic areas. Having a diversified investment portfolio reduces the risks associated with a particular asset class, sector, or geographic area.
Your financial advisor will keep track and inform you of how your investments perform over time. Some investments will perform better than others, and your financial advisor will take the time to rebalance your allocation accordingly to account for these performance insights. For example, you’ll be advised to allocate more of your investment money toward stocks that are performing well versus bonds that are losing financial value.
GRFS Financial Planning Services in Kitchener, Ontario
Ready to get started? Our experienced finance professionals at GRFS are ready to bring your finances to the next level! Our team is made up of a diverse set of professionals, ranging from financial advisors and bookkeepers to mortgage advisors and insurance advisors. Our varying levels of expertise allow us to provide comprehensive financial advice that’ll help you achieve your goals.
Interested in a quick no-obligation call to discuss how we can help? Contact us today!