Choosing a Financial Advisor

By | March 4, 2013

An average person today knows more about the different mobile phones in the market than about the different kind of financial instruments one may invest in. This lack of education in finance harms many of us in the long run, because it stops us from properly planning for our financial security in the future. In the following sections we will find out more about why and how you should use the services of a financial planner.

Do you need a Financial Planner

Almost everyone could use some good advice on financial matters. However, most people do not use the services of a financial expert because they think that they can manage their own finances. For many people, managing your own finances is the first sign of adulthood or maturity, and they find it hard to escape from this mindset. However, just as it is preferable to go to a lawyer to seek legal advice, it is better to seek the help of a financial planner than to do it by yourself.

An average financial planner knows much more about finances and investment than just about 99% of people out there, so it is likely that you would be served well by a planner. Therefore, it is preferable to consult with a financial planner about how you could better manage your finances.

Hiring a Financial Planner

A financial planner is trained in managing finances and investments, and therefore is retained by people to help manage their money. Such planners are of two types, going by how they charge for their services. Some planners charge for their services based on a commission of the transactions that are done on their advice, whereas others charge a flat fee for their services.

It is often seen that the former kind of advisor are often subconsciously or consciously biased for schemes that result in higher commission for them. This often results in bad financial decisions for the client. Therefore, it is preferable to choose a financial planner who charges a flat fee for his or her services.

Licensed Financial Planners

A financial planner is a self-designated title in most countries, so almost anyone can call themselves a financial planner. Therefore, one has to be careful when choosing a financial planner. The best advice in this regard is to use the services of a financial planner licensed by a self-regulatory body such as the Certified Financial Planner Board of Standards (CFP board) in the United States and Canada. The CFP also licenses planners from 22 other countries including Canada. In Australia, a company in the field of financial planning has to get an Australian Financial Services license. If you are in Australia, you should use the services of a representative or employee of one such company.  Similarly, other countries have their own boards and organizations that license financial planners – you should use the services of a licensed planner rather than an unlicensed one.

A financial planner can help not just manage your investment, but also guide you in how to best utilize your personal assets. Just as a lawyer is needed for your legal needs, you need a financial planner for your financial needs.

One area of concern you will also want to address is that of your credit report. It is estimated that 40 million of Americans have credit report errors! This seems staggering when you consider the implications this can have. While many consider the use of a financial advisor, you may also want to check up on your credit report. If yours has serious errors on it, it may end up costing you hundreds if not thousands of dollars in the future. The Credit Geeks have had over 100,000 satisfied customers help them improve their credit score and they even come with a 100% money back guarantee.