Can financial advisors offer you the right financial advice?

by

advisor

In a country like India, where there s no dearth of financial firms, there s no shortage of financial advisors as well. The reason why I ve put the word in single quotations is because a lot of them like to call themselves advisors ; when in fact they re really not. Just being an employee of a financial firm doesn t make them financial consultants. In fact, more than half of all the so called financial consultants are in reality just well trained salesmen. They re not well trained advisors and this is something you should keep in mind before consulting them.

As a result of skilled training, they are able to sell financial schemes and policies effectively but that s just because it s a part of their job to garner more clients for their firm. In true sense, a good financial advisor is someone who can actually brief you about various financial plans after carefully assessing and evaluating your income. In case of any doubts, they can straightforward clear it any explain you the nuances of every plan. I hope you get the difference between a trained sales-person and a well trained financial advisor now.

Before consulting a financial advisor, you should see to it that you re in a position to do so. Just being driven by your colleagues and influenced by your peers to invest isn t a good enough reason to invest. The right kind of investment takes places when you re ready for it and have the necessary resources. Here s when you should hire a financial advisor:

When you re in the right position: When you ve a good financial capacity to invest at various places, you should call over wealth management advisors. They will be able to guide you properly and help you understand various options such as mutual fund investment, real estate, stocks and shares, insurance schemes, fixed deposits, commodities etc.

When you don t have the time: Investment is an activity that consumes a lot of time. If you want to do it all by yourself, you ll find your shoe sole being burnt due to the constant rounds you ll need to make at the offices of financial firms. You will have to do all the paperwork, understand various policies and constantly monitor all your investments. It would be a tad difficult activity to do if you ve a job or a business and are engaged there. Investment advisors can do all the paperwork and monitor the investments on your behalf and thus save you a lot of time for merely a little commission.

When you want to stay updated: The financial market is ever changing and dynamic. Daily, new policies and schemes spring up. A financial advisor can help you stay updated with the latest trends in the economic market.

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Article Source:

ArticleRich.com

By Tristan Hunt

If you are purchasing a home and have a substantial portion of your assets inside of a retirement account such as a 401K, 403B or other retirement product or annuity, you may choose the increasingly popular option of tapping those funds to make a down payment on your new home. Like any other accounts you may have in your name, such as brokerage accounts and bank checking, savings and money market accounts, most popular retirement accounts qualify as assets to be counted toward your ‘reserves’, a measure used by mortgage lenders to determine how many months of payments you must have in order to serve as a buffer covering payments you might miss if there were any interruption of your income.

Retirement accounts such as 401(k) or 403(b) annuity accounts are generally administered or sponsored in whole or in part by your employer. In addition to serving as excellent documentation of your earnings and savings, your 401K or 403B accounts can be used in a variety of ways to help finance your new home purchase. Depending on the specific restrictions applied to your account, you may have the option of withdrawing money directly from the account or ‘borrowing’ money in the form of a loan (against your own funds) which is repaid at a generally low rate of interest. Regardless of whether you cash money out of your account or take a loan against it, be sure to thoroughly document any details of the transaction, including any withdrawal or loan application paperwork, demand drafts, cashier’s checks, deposit tickets, etc. for the purpose of substantiating this source of funds to your lender.

Lenders do treat down payment money from retirement accounts differently from program to program and state to state, sometimes from case to case. In particular, borrowing money in the form of a loan may increase what the lender’s perceives as your monthly debt obligations, because even though you are borrowing money from your own account, you are still obligated to make a payment every month which you wouldn’t have to make otherwise, and lenders will often consider this to be detrimental to your qualifying DTI or Debt to Income Ratio, making it harder to borrow as much money as you may need. On the other hand, cashing out any type of retirement account will always create a taxable event and sometimes also a penalty fee, which generally accounts to more than the nominal interest rate common to the loan option. Speak with your loan officer about the requirements of your individual program and weight the options with him/her or another trusted financial professional.

You may also consider speaking to your employer about any down payment assistance programs which may be available to you as part of your benefits package. These can come in many forms, but it is important to clarify with your employer that any down payment assistance granted does not amount to a loan and that there is no expectation of payment. Why would an employer want to help you make a down payment? Call them old fashioned, but most companies do want their employees to stick with them, and if your employer helped you achieve ownership of your dream home, how would you feel about them? As with the 401K, 403B or other retirement account options, down payment assistance from your employer should be documented in detail and all copies of communication, checks, deposit tickets and statements of account, along with signed records stipulating that the funds are given freely and not to be repaid, should be kept for submission to your lender.

About the Author: Tristan Hunt is a seasoned financial professional with a wealth of experience in the mortgage industry, advising clients on

debt consolidation, refinancing & investor loans

. Website: http://www.RefinanceOne.net

Source:

isnare.com

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