FINANCIAL PLANNER - THINGS YOU NEED TO KNOW
Are you struggling to find the right key to summon your financial state? Have you always been clouded with how much to spend over saving? You might need a hand if you find yourself trapped in these questions.
Having to go about life can always be challenging. However, the more we strive to have everything we desire, often gets us circled with confusion.
Getting the right financial planner will help you find the “balance.” They will not only help you organize your expenses but also allow you to focus on your future goals.
FIND THE MOTIVE
Before you sit down with your financial planner, decide which part of your aspects you need help with. Split necessitates against needs. The primary focus of having a financial planner or having a financial plan is to understand the importance of saving. The contribution of the money flowing in from your present job/any investments will directly impact your expenses; hence a financial plan will be an excellent way to avoid getting yourself into debt.
The one who helps you chart a course for all your financial needs and wants is the best financial planner. This can cover investment advice for retirement plans, insurance policies for you and your family, family planning that incurs expenses, and repayment of any debts. If you have any short-term goals that require a tremendous amount of self-control in managing your expense rate, financial planners will also contribute to this regard.
LET’S UNDERSTAND WHO IS A FINANCIAL PLANNER
A financial planner might be someone who aims to create a financial chart against your income vs. expense. They help you chart the ongoing course of your economic life, from budgeting and saving to minimizing your tax burden, leaning towards improving daily financial hassles, and leaving a financial legacy for your children. Their motive is to guide you in understanding the importance of a financial plan that will cater to you in serving your long-term goals.
Do not get confused between a financial advisor and a financial planner. Financial advisors have a significant amount of expertise, and they work as a stockbroker for you. In contrast, a financial planner will help you minimize your daily habits of expenditure, create a mild sense of future-related concern where you will find yourself at ease, and have a more wise way of looking at your bank account.
KEY BENEFITS OF A FINANCIAL PLANNER
• The process of financial planning helps you to set goals
• Financial planning is an excellent source of motivation and commitment
• Financial plans provide a guide for action and decision-making
• Financial plans set performance standards
• Financial planning has additional emotional and mental health benefits
• Financial planning is shown to improve economic outcomes.
• Financial planning help in becoming goal-oriented
FINANCIAL PLANNER VS FINANCIAL ADVISOR
The terms financial planner and financial advisor are often used somewhat interchangeably. Both types of professionals offer financial planning services that help clients reach their financial goals.
Financial advisors, however, are generally considered to be a much broader category; they are professionals who manage your investments, arrange insurance and act as your stock broker, in addition to offering financial planning services. Financial planners limit themselves to more targeted services.
3. HOW TO FIND A RIGHT FINANCIAL PLANNER
As we have understood, a financial planner helps you manage your financial issues on a personal or professional level. While most of them might have the same advice for you, not all of them have your best interest at heart. We need to look for someone who invests their time in helping you focus on your future goals. Someone who would sit with you and plan a chart that will benefit you and your loved ones. This is why you need to carefully evaluate potential financial planners, and make sure they are good for you and value for money.
Another critical aspect of choosing a financial planner is knowing their background. Check their history, as they will be exposed to your confidential details, it is applicable for you to know if their records hold any complaints against them; such could be red flags.
If the financial planner you have chosen has successfully managed their economic life, then there isn’t any doubt their recommendations will be practical for your financial plan.
TWO TYPES OF FINANCIAL PLANNERS
• FEE BASED FINANCIAL PLANNER: The fee based financial planners are the ones who might act as financial advisors. As stated above financial advisors contribute on the idea of where to put your money as an investment.
A fee-based financial planner works differently as that of a fee-only financial planner. Although a fee-based financial planner charts a financial plan, they recommend you to invest into for future development. Through this they try to generate revenue for you, also try to generate a percentage of commission from returns you get. Saying this, working with a fee-based finance planner may result in a conflict of interest. This can happen when a fee-based financial planner recommends a financial investment, maybe an investment into a stock or an insurance policy, where they can receive a commission once you crack the purchase.
• FEE ONLY FINANCIAL PLANNER: The fee-only financial planner works on a yearly payroll.
Their primary interest lies on regular settlement of your financial stability. They would motivate you on securing your future by taking insurance, however earning commissions from that of purchasing one is not their interest. You are most likely to work better with fee based financial planners as they can be more reluctant towards investments of higher values that incur risks.
4. CHOOSE RIGHT AND CHOOSE WISE
The key in finding the right financial planner comes before you have cleared the confusion of affordability. If you feel that you peruse the knowledge and understanding of finding the right balance between your needs and wants, then you most definitely would not want someone to manage your life, for you.
But, being said that, there is no harm in a healthy experiment. Your needs strongly depend on the strength of your affordability.
Besides from the cost incurred in hiring a financial planner, you need to make sure that the financial planner you choose connects with your mind set. This means that you and your financial planner will be on the same page, and any exchange of information will have a high chance of a positive impact towards your financial goal.
LASTLY, LETS TAKE A LOOK AT THE MOST IMPORTANT QUESTION, DO YOU NEED ONE?
Though it may occur to us that all financial planners are inclined towards the majority of the wealthy crowd, however far from the actual truth.
Controlling your expenses and the struggle to save can always be extremely complicated. Which is why turning to a professional, who has the upper hand and experience in helping ample amount of people struggling with the most common situation, will be a great way to make things easier and less complicated.
By working with a professional you may generate ideas of having a stable lifestyle, worry less about your expenses, and build a strong foundation for the future.
THE BOTTOM LINE
If you’re concerned with the cost of working with a financial planner, you may reconsider balancing your financial expenses. Having a financial planner will help you to set your future goals, for yourself and for your loved ones.
