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Why is Financial Advice For Debt Management a Good Idea?

 blog

 2 minute read

Published: Wed Apr 26 2023

By Sean Hundtofte, Ph.D., former Adjunct Assistant Professor at NYU, Financial Economist at the Federal Reserve Bank of New York. Expert in Financial Economics and Mortgage Lending Solutions

How Financial Advisors Can (And Should) Help With Debt

Financial advisors often help with wealth management, tax planning, and estate planning. But what about financial advice for debt management? In today’s environment, if you’re planning your financial life, it can be difficult to make informed borrowing decisions. You’re likely on your own when it comes to understanding the strategies behind your debt and lines of credit. This is where a financial advisor for debt management can provide invaluable guidance and help with individuals understand the intricacies of their borrowing decisions.

Why a Financial Advisor for Debt Management is Essential

One statistic: 81%. That’s the gap between users’ expectations for assistance with credit and borrowing and the support they actually receive. This figure comes from wealthy investors discussing their expectations from their wealth managers. While 83% anticipated guidance with loans and credit management, a mere 3% reported receiving it!

The Gap - Services Expected vs. Services Received Source: https://spectrem.com/Content/expectations-not-always-expected.aspx

A second statistic that should motivate better financial advice around borrowing: Americans need to be richer than ever to buy their first homes!

How Financial Advisors Can Help Manage Debt

Debt is not always a bad thing–it’s a tool to achieve your personal financial goals, such as homeownership. A financial advisor for debt management can perform tasks like monitoring the latest market prices for borrowing to help clients secure new financing. They can provide strategic and tactical advice on suitable products for their clients unique financial situation. In cases where clients are struggling with debt and face financial distress, the objective perspective of a financial advisor can prove invaluable. Many borrowers haven’t drawn up budgets or regularly update them. That should be bread and butter for a financial planner. Financial advisors for debt management can equip clients with the latest technology and support for borrowing. While advisors may not know specific details about a client's loans, they can connect clients with third-party technology and tools to optimize their debts. Solve Finance's debt optimizer (or API) accesses real-time credit and borrowing data, providing up-to-date market information on better borrowing options for clients and their advisors.

Working with a Financial Advisor: Build Wealth Through Better Debt Management

Why go to a financial advisor for debt management? Not all debt is bad. There are useful and productive uses of debt, and financial advisors can help manage your existing debts or identify the best new loans for your situation.

The goal of debt shouldn’t be to pay off all debt as quickly as possible. For example, if you have a mortgage at 3% and treasuries today currently offer 5%, paying off your mortgage may not be the wisest decision. Independent, objective financial advice for individuals – and how that differs from typical emotions around borrowing and debt – is what expert advice and coaching can help with.

The Bottom Line - How Solve Can Help

Solve Finance is a specialized borrowing platform that assists households in managing the liability side of their balance sheets. As a natural partner for wealth managers and an unbiased financial advisor for individuals, Solve Finance can help anyone achieve their financial goals more effectively. By achieving optimal borrowing outcomes, households can save more today and secure a healthier, wealthier financial future.

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