Tips For Finding the Right Financial Planner

Tips For Finding the Right Financial Planner

Financial planning, are you ready to start?

It’s something many say yes to the idea of, but often have no clue where to start. When people begin financial planning, they often fail before the start because they get tripped up by some intimidating questions like:

  • How much money do I need to start investing?
  • Where do I invest?
  • What is my net worth and what does that mean?
  • How can I afford to retire?
  • What financial goals should I set and how do I achieve them?
  • Should I use an investing app?

It’s no wonder so many people get intimidated before they even start. It does not need to be this scary! Financial planning allows for personal and family financial goals to be reached by defining the goals and creating a plan of action.

Financial goals could include buying a home, saving for retirement, starting a college fund, or even taking that vacation you’ve always dreamed of.  Good money management, along with some financial planning, can help you achieve your goals while at the same time preparing you for financial setbacks such as injury, illness, and property damage that could arise at any stage in life. 

In today’s connected world, the internet is full of information and investing apps similar to Robinhood, the real trouble is choosing something! It’s important to ensure that the information you are working with both comes from a legitimate source and applies to your personal situation. For these reasons, hiring a financial planner is the best way to assess where you stand financially and create a plan of action to attain your goals, but how do you find the right one?

Financial Planners – Who Are They?

A financial advisor is like a money coach. Their job is to assess where you are financially and develop a tailored plan of action based on your needs and desires in your financial future. A financial planner will help you make long-term financial decisions using their wisdom, education, and expertise so you don’t have to make financial decisions blind. They will keep up to date with the current trends and make sure that they are doing the best for you financially, using a resource like LeadJig to assist with their requirements so they can pass that expertise onto you. The process of choosing a financial planner can be daunting but remember: you’re the one hiring them. They have to appeal to you!

Things To Discuss Before Hiring a Financial Planner

Education and Training

The search for the right financial planner can be daunting, so start with the basics. Ask your prospective planners about their education, certificates, and licenses. Because financial planning has so many specializations, it is crucial to know if the advisor in front of you has the competency and qualification to help you in your specific situation. When it comes to certifications and courses available to become a financial planner, there are dozens. The most sought-after qualifications include Certified Financial Planner (CFP), Chartered Financial Consultant (ChFP), and Chartered Life Underwriter (CLU.) These are just a couple of the many certifications obtained by completing a course and passing the exams. Also, be aware: holders of these certifications are bound to the code of ethics per the course curriculum, so don’t be afraid to ask!

Professional Experience

The classic way of thinking goes “the more experience, the better the professional,” but when it comes to financial planning that isn’t necessarily true. Due to shifting economic landscapes, a planner whose main clientele is tech developers now in their forties might not be a good fit for a solo entrepreneur in their mid to late twenties. A few good questions to ask if you are trying to assess if this person’s experience is a good fit for you are:

  • How long have they been working as a professional financial advisor?
  • What association with the financial domain do they have?
  • Do they have clients that are at a similar financial standpoint to you and how have they helped those clients?

Ideally, you want a financial planner with significant experience in the financial domain and previous experience working with clients similar to you. For this reason, many financial planners rely on word-of-mouth to get new clients in similar financial situations. Ask your friends if they’re working with anyone they’d like to refer.

Payment

It’s important to know how your financial planner makes their income. Most have hourly rates or will have a fixed rate to complete an agreed-upon project. Some financial planners are fee-based, meaning they charge a percentage of an asset they manage. Some work based on commission, so they get paid if you sign up for an investment or insurance service. 

Standard of Care

When it comes to finances, all planners when working with clients follow one of two “standards of care,” a suitability standard and a Fiduciary Standard. A suitability standard allows advisors to pitch financial products or services based on client need, but their advice only needs to be suitable for the client, not necessarily in the client’s best interest. Brokerage firms and insurance companies follow a suitability standard. 

An advisor who is registered with Registered Investment Advisory (RIA) firms likely follows a Fiduciary Standard. Fiduciaries are required to act in the client’s best interest at all times. If the standard of care is your biggest priority when it comes to financial planning, go for the Fiduciary Standard.

In Conclusion

Even with a world full of financial information, it can be daunting to even get started. Finding the right financial planner can help get you started. You can go it alone using the information available and useful investing apps like Robinhood, but it is much easier to feel confident making big financial decisions with a financial planner by your side. 

It does take some searching, but the right person can help you define your goals and create a long-term plan of action to attain those goals while making sure you are financially secure in case of setbacks. When it comes to your financial future, don’t hesitate to find help. With the wisdom and guidance of the right financial planner, you could be looking at a nice cushy retirement fund. Find someone who puts your financial interests first, and let your money work for you!

David Robertson