Professional Financial Planning
How to Find Professional Financial Planning
If your bills are piling up, you are having tax troubles, or unexpected costs are putting a dent on your savings, it may be time for you to get professional financial planning. Here is some advice to help you find good professional financial help.
First, you need to determine if professional financial planning is right for you. You should be aware that in most cases certified financial planners manage assets of at least $100,000. Professional financial planning services may cost you anywhere from $5,000 to more than $100,000 annually. Financial planners also charge an average of $250 per hour.
While rich people are the usual clients of professional financial planners, the average worker can still benefit from their services. Some examples of circumstances where professional financial planning would be helpful include receiving a huge amount of money, losing over 20 percent in your portfolio investments, having a baby on the way, and if you are nearing retirement.
Once you have determined that you do need professional financial planning, it is time to search for the right person to do the job. This part may be confusing with all the numerous titles and acronyms related to the job but what you need to look out for is the acronym "CFP", which means Certified Financial Planner. If the person has this after his name, that means he or she has undergone a year and a half to two years of rigorous financial planning program in the various areas of finance to include insurance, investments, taxes, estate planning and retirement planning. A certified financial planner also has a minimum of three years of experience.
It is recommended to look for fee-only professional financial planning. This means the financial advisor will charge you a fixed rate, either an hourly rate or a charge of 1 percent of the assets under management. Some financial planners are paid by commissions for financial products that they are able to sell and others by a combination of commission and set fee. You do not want a financial planner who will try to sell you a product so it is best to choose one that offers a fee-only service.
In addition, beware of financial planners who do not seem to make an effort to get to know you and your financial needs and goals. If the financial planner has a really long list of clients, it may mean that he is good at his job but it might also mean he will not be able to really focus on you.
You also want someone who is honest and can give you the complete picture of your finances, because that is exactly why you are getting professional financial planning. You need to know all the possible risks of your financial decisions and not just the rosy details. Lastly, check the track record of the financial planner before finalizing your decision to hire.
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