Whether you’re a recent graduate or a seasoned professional, a single person living in the big city or a family living in the suburbs, you could most likely use the advice of a financial planner. A big misconception is that financial planners only manage the big bucks of the country’s wealthiest people, but that couldn’t be farther from the truth. The trick is to find the best financial planner for you and your needs.
How do you do that? A big part of finding the best financial planner has to do with how your personality fits with his or her personality. Sometimes you click with people and sometimes you don’t. But personalities aside, there are a few key qualities that every good financial planner should have.
Know what they’re talking about
This probably goes without saying, but it’s very important that you choose a qualified financial planner. If you want generic advice you can talk to your neighbor over the backyard fence. If you’re paying for quality financial planning advice then that’s exactly what you should get.
The best place to start is to look for a Certified Financial Planner™. This is a designation that is reserved for financial planners that take certain financial planning educational courses, pass an exam with a historic pass rate of around 60%, adhere to ethical requirements, have at least three years of financial planning experience, and keep up with continuing education.
Don’t be shy about asking your financial planner when they received their CFP® mark and how long they’ve been in the business. Trust me, we’re used to it.
Listen to you and your goals
If you walked into a store and saw the sales clerk recommending the exact same outfit for every single client, would you buy it? Probably not. The same principle applies to financial planning. You don’t want a financial advisor who gives blanket money advice to everyone.
Your personal financial situation is different from other people and therefore you need tailored advice to help you achieve all your goals.
Disclose the fee structure up front
This is very important. After you’ve met a financial planner, get a good vibe from them and are comfortable that they’re qualified to do the job, it’s time to talk about money. Before signing a contract – financial or otherwise – you need to know how much the service is going to cost. If it’s “free”, then you probably want to start doing more research.
There are three types of financial planner compensation: fee-only, fee-based and commissioned.
Commissioned financial planners can sell products such as insurance policies and mutual funds and those products pay a commission back to the financial advisor. Sometimes the thought of a hefty commission can blur a financial advisor’s advice.
Fee-based financial planners may be able to charge and deliver a financial plan, but they are also able to sell products and receive commissions.
Fee-only financial planning firms remove some of these conflicts of interest because they deliver advice that is not based on receiving a commission. They don’t receive any commissions, referral fees or kickbacks of any kind. Your Richest Life is a fee-only financial planning firm.
Cater to your special needs
Qualified financial planners can provide advice to anyone, but some prefer to work in a specific niche such as small business owners or female professionals. I can assist anyone and everyone but if you look at my Twitter profile, you’ll notice I specialize in Gen X (born in years from 1960s to early 1980s) and Gen Y or Millennials (born from 1980s to early 2000s). This is where I feel I fit best and can really optimize my advice.
I believe everyone should have access to financial resources and coaching. Schedule a free 30 minute consultation to see if I would be a good fit for your financial needs.