what does a financial planner do

What Does a Financial Planner Do and When Do You Need One?

Your arm snaps in half as you’re playing basketball at the local gym. Do you try to mend it yourself, or do you seek a doctor?

If you have any common sense, odds are you seek the trained and experienced professional.

Here’s another question – when it comes to the security of your financial situation, why wouldn’t you seek the same level of professionalism? Statistics show one-third of Americans have no money saved for retirement!

There are many factors to consider when hiring a professional financial planner, but the decision to do so could be the difference between a good retirement and a retirement that suits your lifestyle expectations. This article addresses the basic fundamentals of when it’s time to hire one, how to know whom to hire, and why you should want to.

Most importantly, this article answers the question, “What does a financial planner do?”.

Why Hire One

First and foremost, it’s important to know that what a financial planner does could be specifically useful during certain periods of your life. You might not think you need to hire one “quite yet,” but the fact is you can’t consider hiring one too soon in your life.

You really can’t go wrong in hiring the best financial planner you can find at once. Most people start asking, “What does a financial planner do?” during particular life transitions, such as:

College graduation. You’ve got your first “big kid” job, and you’re smart enough to already seek guidance on the best practices to secure your retirement.

A new marriage. Merging households with your significant other is exciting, but it also brings new financial challenges and hopeful expectations of a stable future.

A little one is on the way. Babies are adorable, but also expensive! Especially with the consideration of a college fund, this is a great time to look into what a financial planner does.

A recent divorce. The court costs and asset delegation can be an emotional whirlwind of signatures and uncertainty. Ease your heartache with the assurance that “starting over” won’t ruin your chances of a happy, secure future.

A salary increase, promotion, or transition to a better job. You’re making more money now, so what do you do with it?!

Starting a business. A brand new business venture can be both rewarding and nerve-wracking. What does a financial planner do but calm your nerves?

Basically, life transitions can be tough to handle alone. What a financial planner does during these times is relieve you of any stress or financial anxiety by shifting your focus to positive habits that will protect your assets and lifestyle in the long run.

When to Hire One

Perhaps you consider yourself an expert when it comes to budgeting your personal finances. (Congratulations on that, because statistics show that only 1 in 3 Americans have household budgets.) Maybe you’ve never been late on a bill payment and have learned how to always keep a healthy savings account.

While these are great habits, there is still a lot you could learn.

To be realistic, the financial planner you deserve might not be the one you can afford – yet. At the same time, if you are reading this article, odds are you are researching what a financial planner does for a reason. Hopefully, you have worked out that the expenses of professional financial guidance are at present worth it for you.

If you’re asking, “What does a financial planner do?”, your next question might be, “How does a financial planner make money?”.

There are multiple ways a financial planner could get paid.

A percentage of assets would be one option. This ranges from 1%-2%. The more assets he or she manages, the less the fee will be.

Other options for payment include a project-specific fee, a retainer fee (quarterly or annual), commissions through products or services you purchase, an hourly rate or a combination of any of the previous.

So, what does a financial planner do? He or she makes money by making sure you have the most money possible!

What Does a Financial Planner Do?

When it comes to what a financial planner does for his or her clients, you can be sure the process starts with the questions you initiate. For example, what does a financial planner do to actually ensure your assets and retirement plan are in line with your goals?

There could be many reasons you are starting to consider hiring one, and your further questions might look like some of these:

  • Am I saving enough for retirement?
  • How do I go about preparing for my children’s college educations?
  • Will present or future inflation affect my retirement?
  • Where should I invest my extra money for the highest and most secure returns?
  • Am I doing my taxes right, and could I be taking care of them better?
  • Is my mortgage up to par?
  • Is it more important to save now, or pay off debt now?

If you find a good financial planner, he or she won’t answer any of these questions until between the two of you there is a mutual understanding of your immediate and long-term financial situation. What a financial planner does is take your current situation, consider your future desires and goals, and shifts your focus so as to guide you to those goals as securely and peacefully as possible.

What does a financial planner do? That all depends on what your present and future financial needs are.

How to Know if You’re Hiring the Right One

Finding a professional, trained, and experienced financial planner will significantly and positively affect your current and future assets, perhaps more than you realize at present time. This is, after all, what they have been training to do since college.

When you start your research, check the credentials and experience before even scheduling a meeting. There are other specific traits that could determine whether or not someone is actually worth your time.

Run the name through a basic search engine to see if the person has cultivated a positive or negative reputation throughout his or her career. Check any websites affiliated with the person’s name to see if it is updated and reputable as opposed to outdated and cheap-looking.

Then, run the name through the Financial Industry Regulatory Authority, to make sure he or she has always remained compliant. An ethical history is crucial to make sure you won’t get swindled or taken advantage of. It’s important to know that what a financial planner does is credible and trustworthy.

You’ll absolutely want to make sure anyone you meet with has the designation of a Certified Financial Planner (CFP). This is how you’ll know if they are able to provide you with legitimate services as opposed to just sales tactics.

After thorough research, you’ll definitely feel more comfortable meeting with a financial planner.

The First Meeting

Financial planning requires a deep understanding of the economic market, so try to feel out his or her true knowledge of the current economy. Don’t worry if he or she also seems to be evaluating you – they need all of your personal and financial information available in order to do their job well. (They might try to sell you some services, but they shouldn’t make that the focus of the conversation.)

Their main focus, of course, should be you and your future.

When you meet with your financial planner, especially the first time, come prepared with a list of the many questions you are sure to have. During that first meeting, continue to evaluate and feel out whether or not this financial planner is a good fit for your level of comfort and needs. A mutual respect and trust are key here to make sure you are taking the right steps in preparing for your future.

What does that look like? Well, if he or she right off the bat starts on about selling financial services or products, your best interests might not be at the forefront of the conversation. You’ll know when your interests are a priority if he or she gathers all of your available financial data before suggesting any specific course of action.

The financial planner should be able to make sensible projections about your future financial situation in relation to the future trends of inflation, market shifts, and other circumstances that are otherwise outside of your control.

What does a financial planner do? By this point in the article, you should have a better answer than when you started reading it.

The important thing is to do your research and ask many questions. You deserve to feel comfortable when discussing your finances.

Hire One Today

It’s important to take care of your money now, so it can take care of you in the future. You deserve the current and future peace of mind that comes with a solid financial plan. Hiring a financial advisor is paramount to ensuring your plans are stable and healthy enough to provide you with the retirement lifestyle we all look forward to.

So, if you’re asking, “What does a financial planner do?”, you’ve come to the right place with this article.

What a financial planner does is help you secure your future by focusing on your present needs and opportunities. We encourage you to reach out to us if you are ready to speak to experienced professionals regarding your lifelong responsibility to your personal finances.

Our expertise has always surrounded ethical and meaningful practices. What does a financial planner do, but bring clients the relief of knowing their finances will be taken care of?

1 Comment

Comments are closed.