Once you have selected the financial advisor/planner of your choice, the next step will be to meet them and discuss about your financial plan. Your advisor will need to ask you questions related to personal and professional matters to get to know you better and to device suitable plan for you. This means that you should be honest with your advisor with questions relating to these matters, especially when it comes to disclosing your income.
When you disclose your income, your advisor
will come to know about your various sources of income, and your spending and
saving habits. The advisor may help you figure out how you can reduce your
expenditure and increase your savings. You should also disclose your assets and
liabilities. If you are planning to take loan for any purpose, the advisor will
guide if taking loan will be advisable. If you have existing loan you will be advised
whether it should be continued or paid off as soon as possible. They might also
be able to rectify if you have made any wrong financial decisions.
By disclosing income your advisor will
decide whether the goals that you have in mind are affordable and what should
be the investment strategy for it based on your income. They will determine
where and how much you need to invest to achieve your goals and for how long
you should stay invested. When your income increases, your advisor will ask you
to also increase your investments proportionately. Thus, your advisor will be
able to design a best plan as per your needs. Your advisor will be able to
decide the type of investment that you need, the amount of insurance that you
will need, how you can be tax efficient and how much you can set aside for your
various expenses and for contingencies.
Many a times the investors may have some
misunderstanding or reservations regarding investing in certain assets such as
stocks. They may fear losing money by investing in such assets. Such
reservation may be limiting your income. Even after being invested for many
years you might not have earned reasonable returns as your investment decisions
were not good enough. The advisor will clear any such misunderstanding and
provide you clear knowledge about such asset which may help you to increase you
income.
Many advisors also provide tax planning
services. Disclosing incoming will enable the advisors to file your income tax.
They will also suggest various options to save tax. This will save you lot of
time and worry.
