People often approach investing with trepidation. You may have seen news stories about people losing money in the stock market or having their life savings wiped out by a dishonest financial planner. As a result, you may hesitate to invest your money or attempt a do-it-yourself approach by reading books or articles on investing. Both of these scenarios often lead to more confusion than clarity. A financial planner can provide sense of security and a clear plan for those wondering how to invest their money. This article will introduce the basics of financial planning and some questions to ask if you are interested in finding a financial planner for yourself.
What Does a Financial Planner Do?
A financial planner is a professional who helps you plan for your financial future. This may include developing strategies to save for retirement, reducing your taxes, estate planning, or helping you invest your money. Financial planners typically have several years of experience and are required to complete certain courses and exams to earn their certification.
What are the Benefits of Working with a Financial Planner:
The main benefit of working with a financial planner is that they can help take the guesswork out of investing. They will get to know you and your goals, and then develop a personalized plan to help you reach those goals. Planners also stay up-to-date on the latest changes in the marketplace and regulations that might impact your investments.
Questions to Ask When Choosing a Financial Planner
Not all financial planners are created equal. Here are some questions you should ask before choosing one:
- How will you be compensated?
Some planners charge an hourly fee, while others receive commissions for selling investment products. It's important to know how your planner will be paid so you can understand any potential conflicts of interest.
- What is your experience?
Be sure to ask about the planner's education, training, and experience. Find out how long they have been in business and whether they have any disciplinary history.
- What are your qualifications?
Make sure the planner has the proper credentials and licenses required to provide financial planning services in your state. In addition, check their background using FINRA's BrokerCheck tool.
Overall, working with a financial planner can be very beneficial - especially if you are feeling confused about how to invest your money. A good planner will take the time to get to know you and develop a personalized plan that is designed to meet your specific needs and goals. Plus, they will stay up-to-date on changes in the marketplace that might impact your investments. When choosing a financial planner, be sure to ask about their compensation structure, experience, and qualifications so you can feel confident that you are making the best decision for your unique situation.