Whether your goal is to go on a vacation once a year or start your own business, everyone has dreams that they wish to achieve. Although there are some key factors that contribute to these goals, there are none more so than good financial planning. By planning your finances, you will know what money you earn, what you spend, and ultimately, how far away you are from your dream. With that mind, we are going to take you through the key things to consider when looking into hiring a financial planner. Sure, you could go it alone but wouldn’t a financial planner be a much easier route? Well, this is exactly the type of question we will be asking as well as how you should look for a planner and what information you will need.
Before we assess anything else, you need to know exactly how a financial planner benefits you. Of course, the obvious action is to help you set financial goals and keep your overall finances on track. However, they do so much more. For example, not only do they help you set a budget and follow it, they assess your liabilities, taxes, insurance, investments, etc. If it’s a fiscal matter, then they’re checking it to keep you fiscally healthy.
The truth is you may do okay without one. However, you’ll likely do so much better with one. For example, are you nearing retirement with little saved? Are you looking to handle a large windfall? Do you want to start building a portfolio of properties? Is divorce or marriage just around the corner? Perhaps you want to start a family? Looking to start planning for your child’s education? Are you looking to deal with finances after losing your partner? The list goes on and on. All of these scenarios warrant action and maybe you don’t know where or how to start. That’s where a planner comes in. No matter your age, you can benefit from the financial knowledge of a planner. They help with all things money in every situation. Big changes mean big decisions. Sure you may be able to make a decent decision on your own, but why would you when help is at your fingertips? Don’t go at it alone.
Before we guide you on how to hire a planner, you need to know that not all planners are the same. There are a variety of financial experts ready to handle your money. The only problem is not all are as qualified as you may think. While some are regulated and certified, like a Certified Financial Planner™ (CFP®), others are not. That means instead of managing your bottom line, they’re trying to line theirs by selling you financial products you don’t need. So when you start looking for the right planner, look for CFP’s®. Due to the high standards of regulation set upon them, you’ll know you’re hiring someone with your best interest at heart. If you fail to look for that stamp of approval, it could cost you more if you went at it alone.
Because your finances are precious and you need to take care of them as much as possible. CFP® professionals will always be the best option. Overall, they must meet the CFP® standards which include an examination, experience, education, and ethics. As long as a financial planner is adhering to these four requirements and principles, you will be in safe hands.
When it comes down to it, choosing a financial planner over another is a pretty major decision. You’re entrusting your complete financial health and future wellbeing in that person’s hands, so don’t rush. You wouldn’t choose just any doctor before researching them. Do the same with a CFP®. Make sure they meet your personal standards. You want someone you trust and who understands you, your lifestyle, and goals.
It’s also important to find planners that specialize in certain areas. For example, while some work with small businesses and sole traders there are others who like to focus on individual clients that just want to secure their future. Similarly, some planners tend to choose particular areas to focus on, like marriage or retirement. The secret to finding the right planner is finding one that fits your needs.
In addition to everything above, gather information about each prospective planner. This gives you the ability to narrow the field. In this phase of hiring a financial planner, you could and should look for the following;
With these simple questions answered, you’re setting yourself up to find the right planner for you. Additionally, you want to hold face-to-face meetings. Remember first impressions are everything. You’ll probably know if you click instantly from your first encounter. Do they build a rapport? Do they avoid questions? Is their office extremely messy? This meeting gives you added details you might miss from internet searches and phone conversations. You’ll get to know the planner themselves as well as what type of business they are running.
Lastly, there is one last piece of vital information—full disclosure. When gathering information about your future financial planner, make sure you get full disclosure – you need to trust the information you receive. You will need to know not only their experience but the affiliations they have with the government and third-party companies that keep them in check for you.
So there you have it! Your complete guide to hiring a financial planner. These reasons are the criteria that I demand when I picked my own financial advisor – yes, I have my own financial planner. I’m a CFP® with a CFP®. There is a great reason but that is the topic of another article.