Wednesday, October 17th, 2018

How to Choose a Financial Advisor

Do You Need a Financial Advisor?

You may have considered this question before. Whether you have or not, please take a moment and read through this. I’ll try to explain what financial planners do, what they don’t do, and why/when someone might need or want to enlist their help.

What does a financial planner do?

Well, that depends. Many individuals refer to themselves as “financial planners” or “advisors”, but not all perform true multidisciplinary financial planning. Investment, insurance and tax professionals sometimes specialize in certain areas of financial planning (such as retirement planning, estate planning, tax planning, or investment management). A CERTIFIED FINANCIAL PLANNER™ practitioner is qualified to give you comprehensive financial advice, as a result of examination, continuing education, board certification and accumulated experience.

In general, individuals who call themselves “financial planners” aim to help you plan for your goals and needs and improve your unique financial situation.

What doesn’t a financial planner do?

A financial planner cannot make you a thriftier shopper, a better saver, or help you earn more money. He or she will look at your financial “big picture”, help you clarify your goals, accelerate progress toward them, and keep you focused on them when the distractions of life come up. They may recommend specific investments, long-run investing strategies, insurance options, retirement planning, risk management methods and more.

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Who needs a financial planner?

If you have some significant assets built up (a home, a retirement fund, savings, etc.) and are wondering about how to protect and/or grow those assets, you’re probably ready for a financial planner. If you currently live pavcheck to paycheck or have less than $50.000 combined in your savings and/or any retirement accounts, then you’re probably not vet in need of a financial planner, and our “average” client is several times larger than this. If you’re under the $50,000 mark, what I recommend you do is research savings strategies and take a good look at your spending habits so you can begin to build your wealth at a faster pace.

What is a “Certified Financial Planner”?

If you see the designation “CFP®” after a planner’s name, you have found a CERTIFIED FINANCIAL PLANNER™ practitioner (alternately called a CERTIFIED FINANCIAL PLANNER™ professional). A CFP® has passed a comprehensive examination, amassed years of qualifying full-time work experience, and regularly participates in continuing education courses. A CFP® practitioner must also adhere to a strict code of ethics as set forth by the CFP® Board.

Can you claim to be a financial planner without being a CFP®? Yes, The field of financial planning remains vastly unregulated – meaning almost anyone can call themselves a “financial planner”. Does that mean a planner without their CFP® designation is unqualified?Not necessarily. But if they aren’t certified, you probably should to inquire about their experience and training.

How do I choose a planner?

In two words … ask questions. Ask trusted friends or colleagues for referrals. Sit down with any planner you’re considering and find out how long they’ve been in business, the number of clients, what their credentials are, how they operate, etc. Most importantly, make sure if and when you hire a planner that your personalities will mesh. This is someone you may well be working with for the rest of your life, so you should choose someone you feel comfortable with.

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