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How To Find a Financial Planner

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A financial planner can help you to reach financial goals throughout your life. Many of your goals (although they may not seem financially oriented in the beginning) are related to finances—retirement, purchasing a home, helping your children to attend college, and starting your own business. A good financial planner will help you to reach those goals by setting up a financial plan. It can be tricky to find the right financial planner for your needs. A good financial planner will understand your goals and give suggestions on the best ways to reach them. It should be an open relationship in which you feel comfortable asking questions.

Difficulty: Easy
Time Required: 10 hours

Here's How:

  1. When you feel that you are ready to find a financial planner, you should first prepare yourself so that you can find one that will help you meet your goals. Take an evening to write down your specific major goals. Try to list where you want to be in five years, in ten years, and in twenty years. Write a few goals about retirement. If charitable giving is important to you, write down your goals regarding your ability to give away money in the future.

  2. Second, you will need to begin looking for a financial planner. One of the best ways to do this is by asking people you know and trust. Ideally you should ask someone who has similar goals and strategies about money. This will help you to find a better fit. You may be in a situation where you may have to find a planner completely by yourself. You can find one through your local bank, a brokerage firm or through a professional organization, such as The Financial Planning Association.

  3. Third, you should gather information from several planners before you decide on who to interview. Many financial planners have income or investment minimums that you must meet before they will work with you. Others will specialize in different areas, such as small business, retirement planning, and estate planning. The brochures should also disclose any fees and/or commissions that the financial planner is paid.

  4. Fourth, you should interview several financial planners before choosing one. You should find a financial planner that you feel comfortable with and who listens to you and your needs. The financial planner may suggest products and services to help you meet your goals, but should not force you into taking certain investments. Also, the financial planner should always be able to explain to you why an investment is a good one, as well any risks associated with the investment. If he refuses to or you find yourself arguing with him, you should likely find another financial planner.

  5. Fifth, you should meet with your chosen financial planner and begin to invest money. Once you have done this you should continue to meet with your financial planner on an annual basis. Additionally you may meet with him when you go through life changing events, such as marriage, having a child and divorce. Your goals may change over time, and it is important to clearly communicate these goals with your planner.

Tips:

  1. Most good financial planners will recognize and emphasize the importance of having an emergency cash reserve on hand. This means that you should have several months’ worth of income in a savings account that is easy to access if you lose your job or another true emergency arises. This will allow you to leave the money you have invested alone.

  2. Financial planners should look at your entire financial picture. They may make suggestions on a percentage of your income to invest, address your insurance needs, managing your risks and your taxes. It is important to carefully consider this advice, but you should be comfortable with any product that you choose.

  3. You should also consider the way that your financial planner is paid. If it is purely on commission, then you need to take that into account as well. A good financial planner will recognize that by making recommendations based on your needs and goals, that she will retain you as a customer, and be able to earn more commissions in the future as well. Just carefully consider the products you are being offered.

  4. You should be able to completely understand an investment before you make it. He should be able to explain the difference between annuities and mutual funds to you, as well as the risk and rate of return for each investment. If you cannot understand the investment or if your planner does not seem able to explain it, you may want to find a new financial planner.

What You Need

  • Your Financial Goals
  • References for a Financial Planner
  • Money to Invest
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