How to Choose a Financial Planner When Seeking Financial Advice
Financial Advice
Very often financial planners are used for financial advice when you have a lot of money and are looking for means to take care of it. Today you can use a financial planner for your financial advice even if you don't have a large cash flow.
t is a good idea to obtain a financial planner for your financial advice if you are having difficulties managing your money on your own. This article will show you all the things you need to know to find the planner that will give you the soundest financial advice, and is the right choice for you. The first thing you want to know is how is your planner going to be compensated. You will need to understand how they earn a living and what the costs of their services are. Will you be paying a flat fee? Are their fees commissioned based? These are questions you need to ask. You also want to talk to several planners before you choose just one for your financial advice. The best option here is through word of mouth. As your neighbors, friends, and co-workers where they get their financial advice from. Make sure the people you ask have similar income and net worth as you as they will often have the same objectives and mindset.
Here are some questions to ask prospective planners:
- How long have they been in business and how did they start off? How long have they been giving financial advice? Don't assume that because they look older they have more experience. Many people become planners after retiring. You want to find someone that has been providing financial advice for at least 5 years.
- Ask them what their typical client profile is. See how many points resemble your own. If it does, you may have a good match there. You want to see someone that provides financial advice to at least 100 clients. You want to see they have routinely provided financial advice to areas that are of concern to you.
- It is better to go to your planner's office rather than inviting them to your home. Take note of a few things. How often does the phone ring before it is answered? Is it organized and active?
- How do they treat you? You want a planner who will give you financial advice only after learning your own needs first.
- Do they investigate your profile before providing financial advice? You want someone who will review your profile on previous investments, insurance, taxes and real estate as well as mortgages, college and retirement funds and so on.
- Do they discuss taxes? You want a planner that is going to consider tax implications before giving financial advice and recommendations to you.
- Call the regulatory authorities like NASD and SEC to find out their record is clean. You also want financial advice from someone who is a member of the Financial Planning Association.
- Ask about investment methods. What investments do they work with and find out if the money will be accessible. Who will make the decisions and can they perform transactions without your approval?
- Will you need a contract? Never do obtain financial advice on a contract that will not give you the option of canceling in 30 days or less. You also don’t want to pay more than 50% ahead of time.
When you are seeking financial advice, you may come across of letters and credentials. These are the most common, and the ones you should look for:
CFA - Chartered Financial Analyst
CFP - Certified Financial Planner™
CFS - Certified Fund Specialist
ChFC - Chartered Financial Consultant
CLU - Chartered Life Underwriter
CMFC - Chartered Mutual Fund Counselor
PFS - Personal Financial Specialist
QFP - Qualified Financial Planner
RFC - Registered Financial Consultant
It is important to note that all of these certifications are given by private organizations. While they suggest a given amount of training or experience, none of them are required or even recognized by federal regulatory agencies. Many planners hold none of these, where a talented planner may have several.
With your planner you will be receiving financial advice on investment, taxes, wills, estate planning, mortgages, and trusts. All of your financial advice is designed to help you meet your financial goals and obligations. If you choose the right planner, they will become an important key in your life. After all, receiving financial advice is a life long necessity!
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