Credit can bring financial stability and improve one’s overall standard of living if it is handled wisely. For instance, you can use credit to buy a home, a car, expand your business, or pay for college. Credit can also fund new business ventures and spur overall economic growth. Although it is normal to have debts of some kind, going overboard can cause serious strains. The debt problem can manifest in many different ways. According to Money Basics, the telltale signs include:
1. 20% or more of your net income goes to service consumer debt (excluding housing expenditure)
2. Missed or late payments
3. You borrow to offset other debts
4. Your checking account is overdrawn up to 3 times
5. You are forced to take on a second job to pay bills
6. You can only make minimum payments on your credit card debts
7. Debt collectors are calling your phone incessantly
8. You are borrowing from your retirement fund or using credit cards to pay regular monthly bills
Debt management solutions can offer a helping hand to people with serious debt problems or those finding it difficult to make minimal payments. Debt counselors are trained to help client’s budget debt repayment and manage finances. For the most part, the debt counselors will restrict their services to the set financial plans proposed by the client or their adviser.
Debt counseling services are best handled by a financial adviser. Part of the financial adviser training is geared towards debt management and restructuring. The other critical areas include income tax preparation, investment management and estate management. According to Investopedia, financial advisers are better placed to analyze and restructure different types of debts from low interest mortgages to high interest credit card debts and delinquent accounts.
After analyzing the debt, the adviser will go back to the drawing board to craft a tailored, debt repayment strategy that fits the clients need. During the restructuring process, priority is often given to delinquent and high-cost accounts. Low interest accounts are also included in the repayment schedule to prevent future problems.
Helping a client bring their debt levels under control can go a long way to boost their credit scores. Once the client’s credit standing stabilizes, the debt can be renegotiated further with creditors. Financial advisers can also help clients craft a solid, long term financial plan touching on issues like life insurance, a retirement savings account, and other extended financial services.
Finding a Financial Adviser
Financial advising is a broad term that brings together an array of professionals in finance and investment fields. The professionals include estate planners, stockbrokers and financial consultants. Hiring a financial adviser is a delicate process that demands serious scrutiny. Knowing where to start your search will save you time and money and give you much needed peace of mind. Investopedia recommends finding qualified financial advisers with the following designations:
• Chartered Financial Consultant (CFC)
• Certified Financial Planner (CFP)
• Certified Investment Management Analyst (CIMA)
• Certified Fund Specialist (CFS)
• Chartered Financial Analysts (CFA)
Chartered Financial Analysts are specially trained to handle assorted issues to do with investing, banking, securities and portfolio management. To become a Certified Financial Planner, one is required to have a bachelor’s degree and a college certification in financial planning or related field. Experience and track record also count when analyzing the competence of financial advisers. According to USNews, You can find a financial adviser using the following strategies:
• Ask a friend, family member or colleague at work for a guided recommendation
• Check out the Garrett Planning Network that provides a listing of financial advisers in each state.
• Check the financial adviser listings by the National Association of Personal Financial Advisers
• Use search engines to find advisers operating near you
• Use robo-advisers for cost effective advice on finance and investment
You can also check up on advisers’ reviews like this one on Fisher Investments. Many online resources offer unbiased reviews on leading financial advising professionals and firms.
Financial advisers play an important role of advising clients with different financial and investment needs to ensure the set financial objectives are met. The main types of financial advisers in the market are robo-advisers, online financial planners and financial advisers operating in an office setup. Automated robo-advisers are generally cheaper and easier to find, but lack the personal touch and degree of expertise needed by investors farther along in their strategy. Office based financial advisers can handle all sorts of financial issues, including complex debt problems. The market segment is also inundated by advisers working as insurance agents, estate planners, bankers and stockbrokers, among other professional capacities.
Taking time to search for the right financial adviser is critical in ensuring you only pay for the services you request. It is also highly recommended to check the adviser’s referrals and backgrounds for certifications, designations and experience. When you find the right financial adviser, you need to know what questions to ask, including their typical fee structure. Once you find an advisor you trust, you will have a lifelong ally in your financial pursuits.