Manage Your Finances

5 Things Your Financial Advisor Should Be Doing For Your Business

When you own and run a business, there are many things in which you should invest to ensure the smooth running of your business. From accountancy and book-keeping to marketing and web design, these things can all make your business more successful and profitable, but in order to implement these services, it’s best to have a financial advisor in place to advise you on these and help you reach any financial goals. 

Financial advisors know the market and industry inside out and have the experience in mapping out your business goals and how you can turn them into quantifiable results. But, when you are considering assigning a financial advisor to your business, knowing exactly what they can deliver for your business is vital in ensuring that your business not only succeeds, but so that you can learn things to help with your business management skills along the way. Let’s take a look at 5 things a financial advisor should offer to your business.  

Looking At Cash Flow Management

Your cash flow management is something that, as a business owner, is likely to be felt in the general day to day of your business. Once you pair up with a financial advisor, part of their job role is to help you generate the cash flow you may need for daily expenditure within your business. 

Typically, they would help to facilitate regular withdrawals from investments or accounts, making sure that you are comfortable when it comes to meeting daily spending needs within the business. Creating a plan around how best this covers major costs or investments is also part of a financial advisor’s role. 

A financial advisor may also look at your business outgoings and make suggestions as to what you are paying for for the business. A lot of business operating costs are high, often without business owners realising, which is where a financial advisor comes in. They can review outgoings, look at the destination and provide advice on how to reduce outgoings, or where to upgrade if a better service is required. 

Tax Planning

Whilst accountants also deal with tax-related business needs, financial advisors are also experienced in helping plan and manage tax. Together, your accountant and financial advisors make the perfect team when it comes to your business tax and can help to manage and minimise taxes, whilst also being best positioned to take advantage of certain strategies which can not only help strengthen your business, but reduce your tax payments. 

One example of how your financial advisor can help you with tax planning is through providing guidance and recommendations as to how much you can contribute towards your investments. Your financial advisor can work with your accountant to create tax strategies and look for business investments you would otherwise make, that may come with a tax free advantage. This can include things such as business life insurance, which is something you may otherwise take out for your company anyway, but may not be aware that there are tax related benefits. 

Advise On Investments

As the consumer of your financial advisors services, it’s important for you to understand what they are recommending and why. It’s best not to follow your advisor’s recommendations without questioning what they are doing with it, especially when it comes to investments being made on your behalf. Remember, it is your money and you should be aware of how it is being used. Financial advisors will set up asset allocation which takes into consideration both your risk tolerance and your risk capacity. Asset allocation simply refers to what is used to determine what percentage of your total portfolio will be distributed amongst various asset classes. 

If you consider yourself to be a risk-averse person, then you may not have a diverse portfolio and your financial advisor may be able to advise on where best  to invest in order to generate some return, whereas if you are more comfortable with trading, you may have a more varied portfolio in which you’re happy to add to with more investments. Your financial advisor will take a look at your asset allocation and the adjust this based on your age and, typically, how long you have left before retirement. 

Regular Financial Monitoring

Once you have an investment plan in place, your financial advisor will provide you with regular statements to keep you updated with your portfolio. Your advisor may also schedule in regular meeting with both you and your accountant to discuss and review your financial goals and progress, whilst also answering any questions you may have. A financial advisor should stay in regular contact with you, whether it’s simply just checking in on any personal or business changes which may impact your financial situation, or changes to your business strategy, including things such as promotions within the business or hiring of new staff.

Retirement Planning

All business owners have a dream retirement plan and, with the help of a financial advisor and planner, you can make sure that these dreams become a reality. Many business owners find that, once they have built their wealth, they struggle to protect their wealth for the long term. Financial advisors can estimate your future financial requirements and ways in which you can make your retirement savings go further. A financial advisor can also help you to manage and negate risks that may be involved with your retirement planning. Each business owner’s retirement plans are unique and individual, so a financial advisor can use their experience to provide further information and insight.

Signs You May Need A Financial Advisor

You can work with a financial advisor at any stage of your life, whether or not you are a business owner. You don’t need to have a high net worth or a huge business portfolio to seek out financial advice. Instead, you just need to have one which is suited to your situation. Taking the decision to enlist professional help is one which is personal, but if you have found that managing the finances of your business has recently become confusing, stressful or overwhelming, then it may be time to enlist the help of a financial advisor. 

You don’t, however, need to feel burdened by your finances to seek help. You may be comfortable and financially secure and still want to work with a financial advisor to ensure that you remain on the right track. You may also simply have no interest in dealing with your finances, in which having professional advice is recommended. Every business is different, therefore the reasons surrounding why you require a financial advisor are, too. 

By Amy Jones

Amy Jones is a freelance writer for many different business publications. With a range of knowledge in the business and investing sector, she is an avid researcher and writer in the field. Having worked with a number of different businesses, Amy is now a freelance writer looking to specialise in the topic.

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