Is a financial advisor worth it ?
The above question is an age-old one. There have been several debates whether financial advisors are really worth the hype and investors are always caught up between hiring one or managing their investments theirselves.
Before we delve into the issues, a Financial Advisor is a finance professional who provides consultations and advice about an individual’s or entity’s finances. Financial advisors can help individuals and companies reach their financial goals sooner by providing their clients with strategies and ways to create more wealth, reduce costs, or eliminate debts.
The recent collapse of the Terra ecosystem in the blockchain space has once again brought to fore the need of having a financial advisor before navigating the murky waters of financial markets like cryptocurrency.
A crypto financial advisor is an asset manager who understands the workings of cryptocurrency and the appropriate ways for investing in it. They are professionals who stay abreast of the rapid developments in cryptocurrency and blockchain space.
There are people that are of the opinion that an insightful financial advisor would have seen the Terra blockchain($LUNA and $UST) debacle from miles away and would have guided clients from falling victims to such unfortunate events.
On the flip side, we have people whose standpoint is that no matter how prescient or seasoned a financial advisor is, he/she wouldn’t have foreseen the evil that befell $LUNA and $UST.
Whether a crypto financial advisor would have foreseen it or not would forever be up for debate. But what is certain is that a financial advisor is worth having, at any cost.
A financial advisor who understands the nuances of cryptocurrencies will definitely help clients make informed decisions. In fact, there are facts to back up the end product of having them.
According to a part of Herbers & Company’s inaugural Consumer Financial Behaviours Study,which polled 1,000 consumers across the United States, people with more than $1.2 million in household assets report higher levels of happiness when working with a financial advisor compared to those who don’t have an advisor.
In a bid to understand the dangers related with not having a financial advisor. According to the National Financial Education Council, a lack of personal finance knowledge costs the average American $1,389 a year. All these points to the need of having a financial advisor.
However, it needs to be said that there is only a slim chance that a financial advisor, no matter how seasoned and skilled, would have fully predicted the Terra incident. Nevertheless, a financial advisor would have cautioned clients against ‘buying the dip’ when the problem with Terra got serious.
Many ill-advised traders and investors out of misguided optimism bought bags of $LUNA when it dropped slightly below the $1 mark, thinking they would wake up the next day and meet it above $5. But the decision proved fatal more than expected as $LUNA went far below the $1 mark till it got to a worthless fraction of a cent.
Sufficient market knowledge, expertise and experience possessed by qualified financial advisors is enough to know the Terra debacle was going to be a long one, but unfortunately, not many have that in possession.
The bottomline is that having good financial advisors can help traders and investors prevent pecuniary mistakes. Having at least one, is a great choice for anyone who wants to get their personal finances on track and set long-term objectives.