Four Reasons to Hire a Financial Planner | Business


Whether you work with various financial professionals (insurance agent, investment advisor, tax preparer and others) or take a personal approach to your finances, working with a financial planner can offer certain advantages.

If you are considering working with a financial planner, be aware that there are many different business models. Anyone can call themselves a financial planner, so know your planner’s credentials. A Certified Financial Planner (CFP) must complete a training program, pass a rigorous test, have experience in the profession, and undergo ongoing training, including updates on professional ethics.

These professionals may provide services through a firm that specializes in investments, income tax, insurance, banking, or financial planning. These companies may be compensated through product commissions, fees, or a combination of both. Understanding the business model and compensation structure can impact who you want to hire.

Here are four reasons to hire a Certified Financial Planner:

• Credits. If you hire a CFP, you are working with a professional who has gone through the thorough process of acquiring and maintaining that credential. The CFP Board monitors whether credentialed professionals maintain their training and ethics. They also have an arbitration process allowing consumers to file complaints if necessary.

• Live. You know your situation. And you could read about strategies. A financial planner sees many clients, which increases their ability to meet your needs. Everyone’s situation is unique. But there are common problems that arise in multiple situations. A financial planner understands the jargon of the profession, which can help them interact with product providers and other professionals. And they know the pros and cons of the strategies, and they are aware of the scams consumers can fall prey to.

• Fiduciary standards. The standards applicable to CFP professionals require them to meet a fiduciary standard of conduct. This means that they must provide financial advice in light of what is best for the client. And if the advice they give will have major implications for a client, the CFP should tell the client that financial planning – not just isolated advice – is recommended. This would include an in-depth analysis of the client’s financial situation and recommendations that incorporate multiple areas of personal finance.

• The integration. A CFP has training in how various aspects of personal finance work together. Investment decisions can have tax impacts. How to save for retirement involves investment decisions, tax implications and longevity analysis. Without adequate insurance in place, personal finances could be decimated. A good financial planner can take a holistic approach with guidance. If you work with other professionals, the financial planner may even be able to work with those professionals and with you.

You might be concerned about the cost of professional advice. Financial planning isn’t free, but it can be cheaper than financial mistakes.

Linda Leitz is a Certified Financial Planner. She can be contacted at [email protected]


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