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How To Pick A Financial Advisor: Do You Need A Financial Planner?


If you’ve made the decision to hire a financial advisor, you might feel overwhelmed by all the options available. Here are five suggestions for choosing an advisor who is the best match for you and your unique financial needs:

financial advisor
financial advisor

1. Why do you need a financial advisor in the first place?

What events led you to the decision to hire an advisor? What are your financial needs and goals? Create a checklist of your wants and needs. You will be using this as your hiring guide.

2. Get recommendations from family and friends.

Does anyone in your inner circle have a financial advisor whom they recommend? Getting referrals from the people you trust is a great way to narrow down your search. Another great source for referrals is other people you do business with. Ask your coworkers, business associates or even your attorney, if you have one, for a recommendation.

3. Set up an interview.

Before hiring a financial advisor, meet with several candidates at their offices. Remember, you are the one doing the interviewing. They should impress you, not the other way around. If any of the candidates start trying to push their services on you or seem to be giving you a hard sell, cross them off your list. During your interview, ask potential candidates the following questions:

  • How does the advisor get paid? For example, is there a flat fee or a charge by the hour or, if they are helping you with stock advice, a certain percentage of earnings?
  • What kind of experience do they have, especially with the goals you have on your checklist?
  • What education and certification do they possess and how do they relate to the work being done?
  • What professional associations do they belong to? Most reputable financial advisors will belong to at least one.

4. Consider your own personal philosophy on money.

Are you a risk-taker or do you prefer to play it safe? If you are a safety-first type, you don’t want an advisor who is going to try to sell you on make-it-or-break-it stocks. You want someone who is going to help you place your money with investments that are safe bets, like mutual funds. Make sure the one that you choose is someone who meshes well with your personality and money style.

5. Make sure you trust your advisor.

Your financial advisor is going to know a great deal of personal information about you. Even if he/she was recommended to you by your oldest buddy, if you don’t feel comfortable, then this person is not the right fit for you. Go with your gut.

Do You Need A Financial Planner – What do they do?

A lot of people are interested in getting help with their finances but don’t know where to start. An important first step is to understand the difference between an Accountant (also known as a Certified Public Accountant, CPA) and a Financial Planner (also called a Financial Advisor).

financial planner
financial planner

An easy trick to differentiating the two professionals is this: when you think Financial Planner, think “planning for your future”. When you think Accountant think, “counting” or “recording information.”

A Financial Planner is an investment professional who can help you meet your long-term financial goals. An accountant, on the other hand, is more likely to help you with an immediate need such as filing your taxes.

There is some crossover in their roles, but in general, your accountant is going to organize, record and file existing data, while a financial planner helps you create financial stability – grow your wealth – through investments, savings, and smart money management.

How do I find a Financial Planner I can trust?

There are two questions that you need to answer (1) How do I find a financial planner and (2) How do I know I can trust him/her?

These are extremely common (and important) questions. Firstly, know that you have not been left out of any loop. With so many people claiming to be financial planners, advisors, counselors, it’s difficult for anyone to discern whom to trust.

The National Association of Personal Financial Advisors has a thorough downloadable PDF called “Pursuit of a Financial Advisor, How To Guide”. Just keep in mind that they are marketing on the behalf of their constituents, not their constituent’s customers per se. It’s still a very informative and educational piece.

But knowing how to find your planner doesn’t solve your trust problem. To find the help that you will trust we recommend – word-of-mouth. Ask your father, sister, colleague…post the query on Facebook. Finding a source that is somehow connected to your community provides peace of mind beyond knowing their credentials and resume.

Regardless of how you came about finding your help, make sure your Financial Planner has the appropriate credentials. You should also interview several candidates to compare not only styles but differing answers to prepared questions.

These are the credentials you are looking for:

  • Certified Financial Planner (CFP)
  • Personal Financial Specialist (CFP/PFS)
  • Chartered Financial Consultant (ChFC)

All the advice points to only working with Financial Planners who charge a Flat Fee. Hourly or Commission fees are not advisable as a general rule.

How to Overcome Serious Financial Problems

You’ve heard it all before. Create a budget. Cut expenses. Carpool to work. Pick up a second job. Keep track of all your small expenses. All of that will help, but only if you stay diligent and focused on the end goal.

As Dave Ramsey says, “what really works is unbelievably fierce, focused intensity.” So find a method (or several) that work for you, and stick to it. Here are a few ways to overcome your financial problems.

debt free

Try the Snowball Effect

Dave Ramsey maintains that the “paying off the debt with the highest interest first” doesn’t work as it should. Instead, he advocates paying off the smallest debts first to create the greatest momentum.

Everyone needs some external motivation sometimes, and seeing your smaller debts fall away will do a great deal to boost your spirits and make you believe that being debt-free is possible.

If you feel the need for some more external motivation, try Ramsey’s “snowball effect.” You might find that it helps you build the motivation you need to succeed.

Use Your Budget

We won’t say “create a budget” here because you probably already have one. You just don’t use it as you should. So pull it up on excel or pull out your ledger and catch it up to date as best you can.

Once you update your budget, stick to it. Don’t justify purchases you don’t need; the only way you’ll see your debt ceiling decrease is to stop adding to it.

It’s hard to remember to record every purchase you make, so try carrying a pocket flip-top notebook with you when you shop. How much you spend on small, unnecessary purchases like cigarettes, lunch with your coworkers, and movie tickets will probably surprise you.

Write down how much you spend (cash, card, or credit), and plug it into your spreadsheet as soon as you get home. You can also download banking and budgeting apps that will let you keep track of your finances on your phone.

Get Organized

Having a budget is one thing, but, according to experts at A C Waring & Associates Inc, it won’t be as effective if you don’t know what payments you owe or when they’re due. Buy a filing cabinet or set up a bill tracker spreadsheet and organize your bills by the due date. Here are a few tips to help you get started:

  • Make a list of all your debts so that you know exactly what you owe and when.
  • Categorize these debts into current, delinquent, and high-interest.
  • Call your creditors and consolidate your monthly payments into two days, one at the beginning of the month and one in the middle. That way you won’t be trying to remember when all of your many bills are due.
  • Set up automatic bill payments through your bank.

Use these and other organization techniques to get you on the right track to financial stability.

Talk to a Financial Professional

Financial companies are there to help you work through your debt. Find a financial advisor you can trust and let them help you through your financial situation. They can

  • offer you debt consolidation plans.
  • help you prepare a stronger budget.
  • make arrangements with your creditors.
  • help you declare bankruptcy as a last resort.

The one thing a financial advisor can’t do is give you the self-control it will take to pull yourself out of debt. They can hand you all the right tools, but only you can provide the willpower to stick to a budget and make the necessary sacrifices.

Use Extra Cash Wisely

When you get that unexpected bonus at work, don’t use it to wax your car or pay for a vacation. It can be tempting to call it “extra money” and spend it on you but avoid the temptation. Instead, throw it at your debt.

After all, the faster you can get yourself out of debt, the faster you’ll have more “extra money” than you’ve ever had. Pay off a smaller credit card debt completely or get ahead on a mortgage or car payment.

The same principle applies to your tax refund, the excess money when you trade in a car, or an inheritance. Use unexpected windfalls wisely, and your debt-free future self will thank you.

It’s not easy to get out of serious financial trouble, but with the right determination and organization, you don’t have to live your life in debt.

How Financial Broker Help to Get Best Loan Deal

The process of getting a loan or investment for a business or house is stressful and lengthy. Add to that the fact that not everyone is a financial whiz who has access to the best resources and you have a problem on your hands.

financial broker
financial broker

Financial brokers then exist to help you get funds or loans to buy a home or a commercial property. Unlike a financial advisor, a financial broker actually does the research involved in finding the specific loan and investment that will best suit your particular needs and even perform transactions on your behalf.

According to their expertise, they can help you with finding a residential or commercial property with a competitive interest rate. They will work with you until you get the funds that you need to make the purchase.

Pick for A Good Financial Broker

A good financial broker works on a one-on-one basis. They will interview you to thoroughly understand your current situations and goals, and they will take into account your credit history, your income, bills, bank statement, etc to see how much it is possible for you to borrow.

Other than your needs and financial condition, a broker will take into consideration the projected profit margin as well. After assessing your needs and looking at their database, they will provide you with all the options available using their expertise and resources to negotiate the best deal for you.

Out of the options presented, once you select the best fit for you the broker will help you present the proposal the right way. They will guide you through the lender application here and will modify and shape the proposal keeping in mind the policies and laws of the bank.

This will decrease your likelihood of being denied -so if you are someone who has had their proposal rejected in the past, getting in touch with a financial broker is a good decision.

Bank Not Always the Only Source

It is important to keep in mind that banks are not the only source of loans and investments. There is a huge market of lenders available other than banks, including those that specialize in providing loans and investments to specific businesses.

Financial brokers have all of these options and resources at their disposal and every broker has a panel of lenders they are associated with (the size of this panel varies among brokers).

When selecting a financial broker, you can choose to view his/her panel of lenders – though that said, there are independent brokers as well who are not tied down with any lenders in particular. They will be able to recommend lenders from a wider range of markets but may not have access to the same deals from specific companies.

The advantage of working with brokers with a panel of lenders is that, in spite of having a limited selection, they will be able to provide you with an exclusive deal in many cases. Independent brokers, also require flat upfront fees.

Along with helping businesses get funds, financial brokers will also advise you about how to manage your newly acquired financial resource effectively; their job does not end after that transaction. If you come across any problem, the broker will help you get back on the right path again.

Warren Paine

Warren is the senior mortgage loan officer who has worked in mortgages and loan industry since 1995. He study in Harvard and major in Finance with a Bsc. Honor Degree. He possesses a Paralegal Certificate as well.

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