One of the questions people never really bother themselves about is whether to have a financial advisor or not. To save more, everybody is busy earning more. But there are ways of investing your existing assets to get higher returns in the short term as well as long term. So, it is not always about earning more to have more, it is also about investing strategically to have more.

There is also sometimes confusion in the mind about whether to consult an investment advisor or a financial planner. Let us clarify the difference between the two. An investment advisor is the one who can assist you build your investment portfolio, like buying or selling of stocks, allocating money on safe versus risk bonds or mutual funds, etc. A financial planner, on the other hand, is someone who helps you manage your finances holistically, right from investment management, estate planning, retirement planning, children’s education planning, insurance, debt repayment, tax planning or any other aspect of the financial industry. It is important that both of them have the right licenses or degrees to practice their roles, like a Certified Financial Planner or a Chartered Financial Consultant. They should have financial certifications from reputed institutions.

Both of them will assess your current situation, understand your lifestyle, liabilities and requirements, and propose plans accordingly. Before hiring one, it’s important to understand the services you are paying for and the tenure of those services. Unfortunately, there are no regularized fees in the market. So, it is important you speak to a few and compare the prices, services, experience and their existing clientele.

Once you have decided upon this, the next steps would be to chalk out your financial goals. Your financial consultant will first try to understand when you will need to use your money, what you will be using it for, and thereafter lay out a plan of action with specific steps you need to take to achieve those goals. They will make the projections based on your personal, professional and financial data. These projections will take into consideration factors such as your age, your dependents, the health conditions of your family, your liabilities or debts, your existing properties and assets, the kind of insurances you may have or need, any emergency expenditure, inflation, your taxes, investment returns, and your potential earnings, expenditures and savings. Note that if a consultant offers you advice with specific policies without assessing your overall financial situation, he is not the right person to go to because he might be just trying to sell a policy for his own commission.

Depending upon the kind of package you are opting for with the financial consultant for their services, they will provide you with the advice. For example, if it’s a one-time consultation, they will be able to provide a plan based on your current situation. If the service is for a year or more, they will assess and revise it from time to time and will be in touch with you to understand and advise any changes in your financial portfolio. If you are opting for a long-term service, they will be able to plan out your after-retirement, child education, children’s wedding, future medical expenses along with the occasional expenditures like foreign travels, car or house purchases, and so on.

Therefore, while you are busy working hard for yourself and your family, take a moment’s break to introspect and analyze if you are able to utilize your earnings in the most optimal manner, and then act accordingly.