THE GOAL OF FINANCIAL PLANNING
Clients bring in financial concerns as different and unique as each of their own fingerprints. No two situations ever present in the same way. The goal of financial planning should ultimately give you the peace of mind to know you are on the right track with your financial future.
What Does a Financial Planner Do?
How Much Does It Cost?
There are a few different fee structures so be sure you ask how the planner gets paid and what biases they may or may not have. The cost of hiring a financial planner can vary depending on who you hire, where they are located, and what type of “fee structure” they use.
A fee-only financial planner earns a flat fee, hourly or otherwise, for their services. A fee-based planner generally prefers to charge advisory fees (often .50% to 2.00% annually of the assets under management) for his or her services, rather than commissions linked to investments or product sales.
A commission-based planner typically receives the total percentage of his or her income in upfront commissions and therefore some may feel they have little incentive to service you on an ongoing basis. This approach could create a conflict of interest or a bias towards one product or another.
In most cases, your initial meeting with one of these professionals will be free of charge (be sure to ask in advance about this), and you can discuss fee schedules and compensation arrangements at that time.
What is a “Certified Financial Planner”?
If you see the designation “CFP®” after a planner’s name, you have found a CERTIFIED FINANCIAL PLANNER™ practitioner (alternately called a CERTIFIED FINANCIAL PLANNER™ professional). A CFP® has passed a comprehensive examination, amassed three or more years of qualifying full-time work experience, and enrolled in continuing education courses. A CFP® practitioner must also adhere to a strict code of ethics as set forth by the CFP® board.
How do I choose a planner?
In two words – ask questions. Ask trusted friends or colleagues for referrals. Sit down with any planner you’re considering and find out how long they’ve been in business, what their credentials are, how they operate, etc. Most importantly, make sure if and when you hire a planner that your personalities will mesh. This is someone you may well be working with for the rest of your life, so you should choose someone you feel comfortable with.
Can you claim to be a financial planner without being a CFP®?
A financial planner cannot make you a thriftier shopper, a better saver, or help you earn more money. Ideally, he or she will look at your financial “big picture” and help you work to enhance it via money management. Depending on their credentials, they may recommend specific investments, long-run investing strategies, insurance options, retirement planning, risk management methods and more.
Carlsbad, CA (760) 707-5555
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