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How to Choose a Financial Planner Carefully


You do not have to be rich to engage the services of a financial planner. And in fact doing so may be one of the best things you’ll ever do when it comes to financial independence. There are people who could have avoided being indebted to others or with loan companies like a cash advance loan company had they consulted a financial planner first.

What Does a Financial Planner Do? 

Financial planners are not stockbrokers and you should not be confused with either of the two as they are totally different. Financial planners offer advice on how to save, grow, and invest their personal money. They help people manage their resources, tackle financial issues, help achieve monetary and investment goals, and prepare people to buy something out of their investments such as assets like a home and other types of properties. There are different kinds of financial planners. Some specialize in retirement, others on estate planning, and still more offer general financial consultation.

How Do You Know If You Need One? 

While you can personally manage money matters; however, there are some factors that you need to consider too; thus, you need financial planners at one point in time. For example, your portfolio becomes larger and you can no longer attend to it one hundred percent and the vastness of it makes you vulnerable to financial mismanagement. You may become too busy as well due to work so you need other people to help manage it for you. There are different reasons indeed.

How to Choose One Carefully

According to several financial experts, the first thing you should do is to find someone with a certified financial planner credibility. You can ask around from friends or request recommendations from employers and even colleagues. You can also check local organizations like the Chamber of Commerce, Credit Unions, friends from your banks, or local financial planner associations if there are any. Once you have a good list of candidates, you may want to conduct an informal interview. 

Here are things you should be conscious of when conducting interviews and choosing financial planners you may potentially work with:

  • It is important to know how they earn money. Some earn commissions from insurances they peddle. Some charge hourly consultancy rates while others deduct a flat fee on your financial investment transaction. Each of these pay schemes have different advantages and disadvantages. For example, an hourly rate is better than a flat rate for a newbie since you have a minimal portfolio to deal with in the first place. 
  • Look for signs and signals that the financial planner only has the best interest of their client at all times. There are many financial planners who will sell just anything for the sake of financial consultation.
  • Background checking is a must, as there are financial planners who were convicted of professional crimes. You can ask for references to begin with. Google it so you can confirm if the information is indeed true. 
  • Be vigilant also as there are those who are marketing brags and know it all financial planners who are fond of projections and predictions. This is an indication that this planner is not very safe to deal with. 

If you are convinced that you need one financial planner for yourself, just take note of the reminders mentioned above.

Photo credit: CBS News


This post first appeared on The Kuripot's Journal, please read the originial post: here

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How to Choose a Financial Planner Carefully

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