Financial Planning

Technically speaking, a Financial Planner is a skilled investment professional that helps businesses and individuals and corporations meet their economic goals by examining their status and setting agendas to attain those goals. Financial Planners concentrate in asset allocation, tax planning, risk management, estate planning, and/or retirement.

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Wow.  Financial Planning sounds really complicated, highly sophisticated, and reserved only for the wealthy, right?  Wrong.

It’s easy to complicate the concept of Financial Planning with fancy words.  Just substitute a couple of simple words and the meaning gets clearer.  A Financial Planner is an experienced, smart person that looks at a businesses’ and a person’s finances and helps them make the most out of what they got. There.  That wasn’t that hard, now was it?

It gets complicated, however, when the actual work is discussed and that icky, awful subject, you know the one…math…is reviewed.  That’s when it all gets complicated, irritating, and, well, boring.  Sure, there are some out there that think math is glorious and fascinating, but to us right-brained people, it’s evil.  It either puts us to sleep or gives us a splitting headache.

All joking aside, Financial Planning, however, is vital.  Developing a financial plan helps you set long and short-term goals, both of which are critical for your future. Once you have a Financial Plan, it’s much easier to make decisions.  Those without Financial Plans easily find themselves in trouble and oftentimes have nothing when it’s most important.   A skilled, experienced Financial Planner can help you set a Financial Plan with goals, such as saving to buy a house or setting up a fund for a child’s college tuition.  Financial Planners also offer advice on how to save and invest.  Some planners also specialize in areas such as estate planning or retirement.

Also, Financial Planners aren’t stockbrokers.  That’s a completely different profession.

How to Choose A Financial Planner

Most Financial Planners have at least a Bachelor’s Degree in financial planning, finance, accounting, economics, business, law or, (ick) mathematics.

Here are some tips when selecting a Financial Planner:

  • Select a Certified Financial Planner (CFP). The certification indicates credibility (though it doesn’t necessarily guarantee it).
  • Ask friends, relatives, and/or colleagues for recommendations. Those in a similar situation might also have suggestions.
  • Study the Financial Planner’s pay structure. You normally want to sidestep commission-based advisers.  When they’re advocating for certain mutual funds or insurance packages, they’re getting a cut of the revenue, so you can never be sure of their incentives.

Fee-based advisers take in one percent of your assets, so they might be reluctant to advise you sell investments or buy a house, even if such was a right move for you because their fee would decrease.

If you’re just starting out and don’t have a lot of assets, a Financial Planner that charges an hourly rate might be best.  Such a planner is probably establishing their practice, so handling your account accurately will earn them a positive recommendation. As well, some experienced advisers will work hourly with new clients as such is the only way said clients can afford them.

  • Seek out a fiduciary. Such means that the Financial Planner has promised to always act in the client’s best interests. This means that anything they sell must suit you.
  • Do a background check. Ask your potential Financial Planner these two questions:  Have you ever been convicted of a crime? Has any regulatory agency or investment-industry faction ever put you under investigation, even if you weren’t found guilty or accountable? Then ask for references of existing clients whose objectives and finances equal yours.
  • Check the potential Financial Planner’s credentials. Research their name on Google.  Research them on CFP at:

  • Be careful of those who claim to have outperformed market averages. There aren’t many people like Warren Buffet.

Most importantly, you should be able to connect with and build a quality relationship with your Financial Planner.  It is a relationship that should last and be profitable for both of you.