Financial Planning is a must, it gives you an edge over others as you are putting time and effort into investing and saving your money as efficiently as possible. Here are few key points you must always remember while considering to choose a good financial planner.
Types of Financial Advisor:
There are many self-proclaimed gurus who would be ready to be your financial advisor. Be careful, understand the kind of financial advisors and understand how they classified. There are primarily three kind of financial advisors based on their remuneration methods.
The most important step while picking a financial advisor or a planner is to check if or whether he or she holds a CFP certification. Certified financial planners abide by the CFP Board and are 100% reliable.
There are CFP certified Accountants, Attorneys, Estate Planners, Insurance Agents, Investment Advisors and Stock Brokers working as financial advisors.
Fee-based financial advisors— These kind of advisors are relatively new in the realm of financial advising. Most of the times, they charge you a particular fee in exchange of the financial advice. These advisors usually work for other brokers and agents.
For instance, you can consider Stockbrokers, Attorneys, and Accountants under this category.
Commission based financial advisors— The insurance agents, registered representatives and the brokers come under this category. They usually sell you a financial product like mutual funds and various insurance policies. Upon doing so, these agents receive a commission for it. Be cautious, there is always a chance that the agents can sell you a financial product for their commission regardless of how useful it is to you, so caution is the key here.
Examples are Insurance Agents and Investment Advisors working for an insurance company.
Independent advisors and agents— These are the advisors that are not tied to any financial brokerage firm or any company. Therefore, your best interests are their best interests. There is no commission from any financial company involved. Examples include independent accountants and attorneys.
What Kind of Consultation Do You Need?
There are various methods of consultation needs one can have. You might be in need of hourly consultancy when you have a situation wherein you are unsure about the decision you must take. Buying a new property? Purchasing land or acquiring a business? Then you can always go with an hourly consultation. Any CFP certified advisor that suits your request needs to be approached.
Sometimes, you are in need of a more concrete plan and a detailed guide to achieve your goals. In such cases, you have to opt a rigorous planning services wherein your insurances, education costs, retirement corpus plan etc. are planned. For needs like this, you can opt for CFP certified Insurance Agents, Attorneys or Accounts who can give you a clear and a well detailed plan.
Also, in few cases, upon amassing a huge amount of money, a lot of people are not finance savvy enough to invest them in the right places and sustain the money with a steady flow of profit. In such cases, one must opt for an asset manager to help them with planning their money and procuring assets. In these cases, you can opt for a CFP certified Estate planner or an exclusive asset managers.
Mark Angelo co-founded the Investment Manager in August 2009 and two affiliated investment managers in 2000 and 2016.