« Trading Software | Main | 401K »
Financial Planners
A financial planner is a qualified professional who specializes in helping clients reach long-term financial goals through resource management. As the market for financial planners has grown highly competitive in recent years, the exact services financial planners offer might vary from case to case, but the advice they provide will likely cover any number of the following areas: cash flow management, investment planning, education planning, retirement planning, insurance planning, tax strategies, estate planning, risk management, and (for business owners) business succession planning.
When seeking a financial planner, have an idea of the specific services you are looking for. Know which planners specialize in the service you’re looking for, their track record for performing those services, and what limitations the planner may have on what he or she can recommend. Since there are so many financial planners from so many educational and occupational backgrounds these days, be sure that the one you approach has the sort of qualifications you’d expect for. Always ask about their background, their credentials, and what they had to do to earn those credentials. Be aware of common credentials such as Certified Financial Planner (CFP), or Chartered Financial Analyst (CFA); these credentials are helpful indications that your financial planner is above and beyond the herd of other, less qualified shysters promising to help you reach the goal of financial freedom [LINK]. Any financial planner claiming to have CFP or CFA credentials can be verified on the CFP and CFA official websites. Any financial planner who provides clients with investment advice must be registered with the Securities and Exchange Commission, or an approved state securities regulator. Be sure to do your homework.
You also need to understand just how your financial planner makes his or her money. Some financial planners work for fixed, or hourly fees helping you go over your finances to develop a solid financial management strategy. Other planners provide that advice while also selling investment products to their customers, and make the bulk of their money on commission. Some planners both advise and sell investments, and make their money on both rates and commission. Be aware of your planner’s ultimate motivations and don’t let yourself be steered into purchases or decisions that don’t seem to serve your needs.
A good financial adviser should be aware of every aspect of your finances. If you are working with a financial planner, and the only interaction that is happening is between you and them, you are being shorted. Finances are an intricate puzzle for anyone, and a good financial planner knows this. He or she should be in touch with their client’s attorneys, accountants, investment planners, trust officers, bank account reps and any other person or institution involved with their client’s finances. By coordinating the varied aspects of a client’s finances, a good financial planner will be able to assess the whole puzzle and determine which pieces need to placed where, in order for the client to come out with the best financial plan for they can have for reaching their goals.
If you only need a financial planner for a very specific purpose, (buying a home, or piece of real estate tends to a common incentive for people to seek out a financial planner for instance,) be sure that the financial planner you approach understands this, and that you are never paying for any more than the services you require. With the market for financial planners as flooded as it is, it can be hard to distinguish A-list talent from the D-list talent. Be a discriminating shopper.
Topics: Investing |
