How a financial planner can help you grow your wealth, save taxes

A financial planner can assist in evaluating a cluttered, directionless or inadequate performing portfolio, in the context of one’s risk profile, while suggesting the right course.

While most people understand the significance of saving and making investments for the future, some might not have the time or flair to keep up with a long-time period plan.

A financial planner guides an investor on their wealth management path and helps manage the finances. There are instances when employing the services of a professional has been very helpful.

To get on track for wealth creation – For those who are ready to take control of their present and future financial situation, hiring a financial planner could be helpful. A good financial planner will first understand one’s current situation, future goals and emotional biases concerning wealth, and then chart out a comprehensive customised plan.

Need clarity in a portfolio – Most start investing in an ad-hoc manner, trying to replicate the success of others or based on suggestions. Experts say everyone’s risk appetite and investment outlook are different. A financial planner can assist in evaluating a cluttered, directionless or inadequate performing portfolio, in the context of one’s risk profile, while suggesting the right course.

During a major life-altering event – Major life-altering events affect one’s finances, such as getting married, having a baby or buying a new house. Experts say one needs to plan and align their finances with the event as well as the impact it could have on one. In such a situation, a financial advisor can offer sound advice and help navigate the event with the correct and long-term approach.

During windfall gains – This could include gains from an insurance pay-out, inheritance, sale of assets, IPO, or unexpected winnings from lotteries, etc. Commonly seen, most people start overspending or get overwhelmed with the situation, and end up making poor personal and financial decisions. A financial advisor can guide an individual on various legal, financial, and tax implications surrounding different types of such gains with the right investment plan to help grow one’s wealth.

When closer to retirement – One’s approach towards money management changes from wealth creation to capital preservation and income generation, when closer to retirement. During this time, a portfolio should have low-risk assets that can generate a steady source of income, which could also require a complete reassessment by a financial planner to ensure that the corpus outlasts the investor and is not affected by inflation and longevity risk.

To optimise your tax liability – A change in the tax regime, raise in income, or to get the best of various tax breaks could be another opportunity to seek professional help. One could be aware of the key deductions, but a financial expert can help maximise the benefits available for a taxpayer under their tax slab and also find opportunities to save tax.