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The evolving role of the financial planner and advisor

Understanding the evolving landscape of investment and financial services and the changing demands of clients is imperative for today’s financial planners. Differentiating between traditional and modern investing with all the sector specific dynamics enables us to offer customised investment strategies that align with clients' unique needs and risk profiles. But at the same time, as well as the use of data-driven insights that provide valuable guidance in today's digitally driven financial services, bringing personal expertise is also an important element of the role.

What is traditional financial investing?

Traditional financial investment includes a number of different products, services and strategies for wealth creation and management.

Asset classes: In traditional investing, the majority of a client’s portfolio should be based on well-established asset classes, including stocks, bonds, and real estate. These are stable and core components of any diversified portfolio.

Long-term focus: Creating meaningful wealth doesn’t happen overnight and certainly is not achieved by taking unnecessary risks with hard-earned capital. A long-term perspective is encouraged for clients who understand that the best results are achieved by steady wealth accumulation and the compounding effect of investments overtime.

Risk Management: In traditional investing a significant emphasis is placed on risk management and capital preservation. It’s important to help clients build portfolios that align with their risk tolerance and financial goals, by correctly identifying and managing this risk versus return.

Engagement: Client interaction and communication is vitally important in this process. Financial planners that interact with clients in a business-casual and professional manner, and who always encourage open communication will build the most profitable relationships, in every sense. While financial planning principles may differ from person to person, having open lines of communication for frank conversations is always necessary in order to find the best solutions for the client. It may require the financial planner to emphasise the importance of a disciplined approach to investing and to the value of a well-constructed, diversified portfolio to get the client on the same page.

Insight to the industry: Something that sets a great financial planner apart from a good one and that brings value to a client who may have been trying to manage their own portfolio, is industry insight. Being well-versed in research, data and industry analysis and presenting comparative solutions allows financial planners to provide informed investment recommendations to their clients.

Today’s financial investing imperatives:

Staying up to date with the evolving investment environment, new products, services and digital processes is almost a full-time job in itself for financial planners. It is incumbent on a proficient financial planner to be aware of all new options and alternatives available for their clients.

In the modern investment landscape, holding a broader range of asset classes, including alternative investments, private equity, and digital assets is better than the narrower, more traditional approach. These options can provide diversification and growth potential which 1.618 financial planners understand.

Faster returns: Today’s investors may want to engage in active portfolio management, taking advantage of short-term opportunities. Financial planners can help clients navigate this approach while managing risks effectively.

Risk-Taking: Due to the nature of high-risk high reward pay offs, today’s investors often have a higher risk tolerance, which means they may be open to exploring innovative and high-growth assets. Assessing these investments and ensuring they align with clients' overall financial objectives, is critically important and a knowledgeable financial planner will be able to match these imperatives.

Client communication: Communication with clients may be in person or online but with so many audio-visual communication platforms, the lines between financial planner and client can always be open. Communications should always address the benefits and potential risks of modern investing strategies taking into consideration the client’s risk tolerance, sector-specific considerations, financial objectives, and the impact of currency fluctuations.

Data-driven insights: In rethinking today’s financial landscape, we include leveraging data analytics, artificial intelligence, and real-time market data which and are valuable tools in today’s financial planner’s arsenal, providing them with the insights needed to make more informed investment recommendations.

Today’s financial planners have a solid knowledge of traditional financial markets but are well versed in the advanced fintech environment, its products, and services. Balancing the two and using information plus wisdom accumulated over many years are skills which 1.618 financial planners have in abundance. No one should risk their current and future wealth on someone that does not embody all the necessary qualities or embrace both the old and the new for the best possible investment outcomes.

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