What do you want?
Before you choose a financial planner, it is essential that you decide exactly what you want.
• Do you want to focus on making your retirement secure
• Are you saving towards a new home
• Do you want to focus more on securing your kids’ education
• Do you want to plan all of the above in one big package
There are financial firms that specialize in one particular planning area, and then there are those who provide everything from planning your taxes to real estate. If you have a narrow focus, such as those mentioned above, then it is better to choose a specialized planner. General financial planning is not as efficient as optimizing one particular area.
Make sure they are professional
To be clear, a professional is not just a person who has an office and a company name, professional financial advisors go through rigorous training in specialized subjects. They know about their area inside out. There are people who get certified in planning retirements, and others who specialize in taxes.
You can identify good professional planners by the certificates they hold. Before you choose a firm:
• Talk directly to the person who will handle your finances
• Ask for their certificates and learn about what it does
• Make sure that they have planned finances for people who have similar requirements to yours
The financial planning works has plenty of armchair experts who can keep throwing technical terms at you, but won’t be able to tell you how much you will save and earn with your investments and taxes. When it comes to serious financial planning, always stick to the professionals.
How do they benefit:
Some financial planners earn their money solely on the fee that they charge you for their services. Others also make their money by endorsing financial products from certain companies in the form of software and investment plans. In the latter case, there can be serious conflict of interest.
If a person is being paid to sell you a financial product, it is difficult to see why he or she would advise you to go anywhere else. As a result, you may end up with the decisions that are designed, not necessarily to save your money, but to serve the planner’s interests instead.
Conclusion: You choose a financial planner only once or twice over your lifetime. Take your time to research and find out about financial planning in general. Don’t jump the gun on any particular planner and select a planner who has your interests in mind and will help you achieve your financial goals.