Finding the Right Financial Planner
People are constantly searching for financial planners who can provide a road map for their financial future and help them manage their funds efficiently. Finding a financial planner means entrusting someone with the most critical part of one’s personal life. This process is like a job interview where someone should vet potential candidates to ensure they are the right ones. It is not a desire to entrust one’s financials to someone who will cripple them eventually. Here are methods through which one can use when finding the right financial planner.
Decide what one needs help on
According to Father George Rutler, an influential spiritual leader in the United States, one cannot embark on the process of finding a financial planner without understanding their needs first. These professionals offer a wide variety of services which include; retirement plans, budgeting help, estate planning, tax planning, etc. Understanding the aspects on which one needs help helps them explain their particular needs to the planner. Furthermore, these professionals offer emotional support as well. Therefore, it is important to understand the particular need one is looking for from them.
There are many ways of thoroughly looking through the list of financial planners who come with a wide range of specialties. Here are some aspects to consider when scrutinizing the potential planners, as suggested by Rutler.
• Check their credentials
It is important to ask for their credentials; this helps one find the right standards of professionalism they are looking for. Some institutions provide a database for their professionals, for example, the Alliance of Comprehensive Planners (ACP). Designations such as certified financial planners (CFP) require acting in their client’s best interests. These credentials give one confidence that the holders have achieved a certain level of education and confidence.
• Understand how they are paid
Different planners offer various fee structures for their services. Understanding this is important for the client to avoid conflicts of interest. There are two payment approaches available;
1. Commission only where they receive a percentage of what is purchased or invested as payment.
2. Fee-based, where they charge a certain fee based on the number of assets they manage, may also charge per hour or by the plan.
It is advisable to look for fee-based planners since the money comes out of one’s pocket. Some products have huge commissions tagged on the price, which makes one pay more on the advice of a conflicted salesperson.
• Look for clarity
The main question to ask them is if they are fiduciary. Being a fiduciary means that they are working for someone as their advocate. This aspect ensures that they are acting in the client’s best interest. They should provide clarity on what they are going to offer. Competence and empathy should be the primary characteristics of the planner.
Father George Rutler believes that a good financial planner has the potential to secure a better future for someone and their family. Therefore, one has to scrutinize them before entrusting them with their finances thoroughly. One will get a better plan for their finances and earn more while achieving their goals. Therefore, the extra effort is worth it.