Financial planning is an important part of any individual’s life. However, too many of us try to manage our finances ourselves rather than seeking professional help when we need it. This can be a pretty serious mistake.
Depending on your personal situation, it might be a good idea to find a financial planner who can help you manage your money. But it’s important that you take the time to make sure that you’re finding a professional who is well-suited to your specific needs.
There are a lot of financial planners out there, so let’s talk about what you need to know to find the right financial planner for you.
Don’t Look for the Quick Fix
It’s all too easy for us to simply ask our friends for a name or look online for a good point of reference. There are so many financial planners out there that combing through all of them can seem like a chore that might just take more time than it’s worth.
In reality, this could not be further from the truth. As the United States Government helpfully points out:
“It’s important for consumers to understand they’re in the driver’s seat when choosing an advisor.”
Being careful and thorough will help you to make the most out of your financial situation in a number of ways, including saving money on things like commissions and fees.
For starters, it’s smart to make sure that you familiarize yourself with your options. Interview a few different candidates so that you can learn how each one works, and make notice of the differences between them.
It’s also smart to get credentials as you’re conducting your interviews. Find out where your candidates received their training and experience, so that you can feel safe in your decision.
Make Sure Your Adviser Suits YOUR Needs, Not the Other Way Around
Different financial advisers tend to prefer working with different types of clients, so it’s smart to make sure that you’re considering candidates that suit your requirements.
If there’s a minimum portfolio size that’s required of a particular advisor’s clients, it’s smart to make sure that you’re lining yourself up with someone who will be able to adequately handle your estate.
It’s also smart to find out how your financial planner works. What kind of engagement can you expect? Will you be meeting weekly, or speaking on the phone?
Knowing this information can help you to find and select a professional that works best with you.
It’s also important to consider what type of relationship you’re looking for. Do you have a few quick and easy questions? Are you looking for some help on a more long-term basis?
These questions are all important, and should definitely be gone over with whomever you’re considering for financial advice.
You’ll also want to get a keen understanding of how their compensation system works. Do they charge a fee, or by commission? Is it an hourly fee? Monthly? Weekly? These are the questions that need answering before you’re ready to pick the right financial adviser.
Finally, make sure you get some references. Social proof is never something to be discounted, and the opinions of others are usually a good way to gauge a potential financial adviser’s track record. It’s important to remember that when you’re making this type of decision, your needs always come first when you’re trying to secure your financial situation.
Above all else, just remember to take your time and consider your options when you’re looking for a good financial planner.
Are there any hot tips that we missed? Let us know in the comments how you found the best financial planner!
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I’ve had experience of one financial planner in the US and one financial adviser in the UK where I live now. But one of the best things I did was to attend a course put on at UCLA called Financial Planning for Women. I was in the midst of getting a divorce and needed some quick, impartial and cheap advice. A course like that was well worth the weekly effort of getting there and taking notes. I gained a lot of common-sense but not obvious advice the easy way — without having to learn from bitter experience. I chose as my financial planner a woman who lectured on the course; seeing her and hearing her in action, so to speak, beforehand was very helpful. Likewise in the UK I attended a pre-retirement planning course put on by my employer, bringing my husband with me. In the end we selected the financial adviser who conducted the course, and we’ve never been sorry we did. In all the economic ups-and-downs since then, our financial “pot” has remained firmly in the black and has grown to almost embarrassing proportions. The adviser had us review how much we would need in retirement to “exist” on and how much to “live” on — an exercise I’d recommend everyone to undertake periodically in any case. (I used old bills and bank statements, sorted out the “musts” like housing, food, etc.; then added in the “would likes” like entertainment, travel and so on.) He also had us review our attitudes to risk in considerable detail, and to divide up our funds into what we would need in secure, liquidatible assets, what in less liquid assets (such as the house) and what we could afford to risk. He keeps in regular touch with fund managers and chooses investments by fund manager as much as by other criteria. We review six-monthly and swap the lowest performing for other investments. It’s been a winning formula for us, and as he has connections to the right sources of information, it’s a lot surer than us trying to read the Financial Times and do it ourselves.
That’s some super smart advice, Laurie. And specific, too!
It definitely helps to make sure that you essentially “vet” your candidates before you hire them as your financial advisor, and your method is certainly one of the best.
A quick Google search with something like “financial planning classes” and a specific city will easily connect anyone with events that can help in this regard, even if one don’t live in a major metro area like Los Angeles.
Laurie, as your comment points out, finding the right financial advisor can make for sustained success in a very big way!