Prepare, Don't Repair: Engaging a Financial Professional Before Crisis Strikes

Between work commitments, children’s schedules, and fall cleaning, how much time is left in our busy days to think about financial planning? Many of us choose to delay thinking about our finances until much later or to manage them on our own, confident that seeking the help of a professional is something we might defer indefinitely.

You usually seek the help of a car mechanic only when your car has broken down. Similarly, people usually get financial advice only when they have landed in a financial crisis. However, proactive planning may help you avoid financial pitfalls and may help you navigate your journey more smoothly. This is why it’s important to engage a financial professional before a financial crisis strikes.

The Value of Proactive Financial Planning

When you make plans in advance, you may benefit from preventative care to avoid financial problems and follow a strategy that addresses your holistic financial health.

Preventive Care

Just like regular doctor visits might help prevent health problems, regular financial planning may work to prevent financial problems. A financial professional could help you spot the warning signs of risk and dampen them down before they turn into larger crises.

Holistic Financial Health

Your financial professional thinks of you—your assets, liabilities, income, and expenses—as part of an integrated whole. From saving and investing to proper insurance coverage, tax planning, and retirement planning, your financial professional keeps track of everything to manage all parts of your financial life to work with and for you in pursuit of your long-term financial goals.

Avoiding the Pitfalls of Reactive Planning

Reactivity tends to cost more. A crisis may mean getting overcharged for emergency repairs or purchasing inventory at a higher price. Financial mistakes that are borne of inadequate planning may be costly to correct.

When facing a market crash, you might have fewer options. The more planning you do, the more flexible you might be when you make decisions (for better or worse). This forward-looking strategy may also decrease the emotional pressure you feel. When you're facing an immediate financial crisis, emotional stress could diminish your options and degrade your mind’s performance.

How a Financial Professional May Help

A fiduciary, such as a financial professional, may look out for the interests of a client by recognizing potential risks and alerting the client while advising on strategies to mitigate such risks (e.g. proper insurance and diversified investments).

Financial professionals may also help you manage your tax liability using strategic investment planning and tax laws. They could help you convert your vision for your heirs and dependents into a detailed plan that lays out how you want your assets distributed, and your dependents supported after your death.

In Closing

A financial professional could help you put together a plan early on, so you know the way forward to financial success. It’s far better to plan and prepare than to fix a problem later.

Important Disclosures:

This material was created for educational and informational purposes only and is not intended as tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

This article was prepared by WriterAccess.

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