Nothing makes people happier than having their finances organized. However, keeping your finances organized can be anything but easy. If you are not an expert in money matters, hiring a financial planner to manage your money can be a great idea.
From managing your investments to making smart decisions and building a financial plan, the right financial planner will do everything for you. They will help you do all of these things based on your future goals and risk tolerance, only charging you a modest fee that you should recouperate from using them.
Getting help on your financial decisions or crafting a monthly budget for your business is definitely not a bad thing. However, with so many professional financial planners out there, how do you choose the right one to work with?
There are different types of financial advisors, fee structures, and services. Sorting through these differences can quite be a challenge. Scroll down to find how to choose the right financial planner for yourself or your business.
6 Things to look for when looking for a financial planner
Finding the right financial planner can take a lot of weight off your shoulders. However, you must do some groundwork before giving someone access to one of the sensitive parts of your life or business.
Thus, you must look for a financial planner capable of providing real value to your life or business. It is necessary to consider several potential options rather than simply picking the first name advertised to you. Here are the few things that you must consider to find a financial planner that works only in your best interest:
Education and experience
The most important thing to consider while looking for a financial planner is to check the potential planner’s qualifications and experience. By reviewing their educational background and experience, you will get to learn whether they are capable of helping you with your financial situation or not.
In particular, you must hire a financial planner that has demonstrated in the past how they apply their knowledge to develop optimal strategies for their clients. Their website and articles can be a great starting point to learn about their qualifications, expertise, and thought processes.
You can call their professional associations to check if they have any complaints against them or not. Moreover, you must ensure you feel comfortable discussing your finances with the candidates you interview. You can ask the candidate about:
- Education, experience, and expertise
- How many clients have they worked with?
- How long have they been in business?
- What kinds of investment products or services are they registered to sell?
Certifications
Next, you must try to glean what steps a financial planner has taken to increase their knowledge in personal finance. The best way to find this out is through the various certifications they may hold. Also, you must take out some time off your busy schedule to learn about both the upfront requirements needed to attain those certifications and ongoing requirements for maintaining the designation.
For example, the Certified Financial Planner designation (CFP) is considered the gold standard in the financial planning field. To get the CFP destination, financial planners or consultants must take extensive coursework, pass a six-hour exam and acquire three years of relevant experience.
Furthermore, to maintain the designation, certificants must complete at least 30 hours of continuing education.
Fee Structures
The next important thing is that you must ask the planner to explain how they will be paid. Once you get a fee structure, you can compare their rates with others and choose the best one that suits your budget and requirements. Usually, financial planners use one or more of the following fee models:
- Hourly Fee: Based on the amount of time they spend with you and developing a financial plan to organize your finances.
- Fixed fee: Based on an agreed amount at the beginning.
- Assets under management fee: Based on a percentage of assets you asked them to manage for you.
Once the fee is decided, you must make sure to get a written letter outlining the specific terms of your agreement, agreed fee model, and services included.
References
Before hiring a financial planner, you must ask for references from clients with similar financial situations and needs to yours. Also, find out if your financial planner has links with other experts such as lawyers, insurance agents, and accountants.
Working relationship
Before you sign the agreement, make sure to understand how often you will be interacting with your financial planner. Some planners have an initial meeting and then check in with their clients once a year. In contrast, others provide ongoing support to help with the implementation of financial plans and coordination with other service agents such as accountants, mortgage brokers, or insurance agents.
Therefore, if you do not have such involved circumstances, you can go for the financial planner that communicates yearly. However, if you want constant support from your financial planner, go for one who frequently communicates with their clients.
Understanding any conflicts
If the financial planner you are planning to hire is qualified to buy and sell investments, you must take some time and understand how they will choose investments for you. Do they recommend a huge range of investments? Or do they only recommend certain products, such as mutual funds that their firm sells?
By doing so, you will be able to make a more informed decision about whether they are the right choice or not.
Conclusion:
Choosing the right financial planner for yourself or your business may seem a daunting task. However, it becomes less challenging once you know what to look for. While looking for a financial planner, you must not rush into something. A bad advisor could cost you more fees and taxes and even make you lose your hard-earned money altogether. Therefore, you must take the time to research the potential planners properly.
Not quite sure where to find the best financial planner? Contact LHK Group. They have a team of financial experts that will help you plan efficiently and reach your financial goals within a short period.
