When you have finally decided that it’s time to get a little help with your finances, you have taken the first, big step on the road to financial success.
But, now you might feel quite stymied about the best way to find the financial adviser that meets your needs. There are many different people out there calling themselves “financial advisers.” As a matter of fact, the term “financial adviser” is not a designation and therefore anyone can call themselves a financial adviser, so you need to know how to choose the right person to meet your needs.
First, determine the type of help you need
Your decision to seek out some financial assistance has probably been prompted by some life event or group of events. Possibly you got your first real job, or lost a job, or you’ve had a baby – but don’t let this singular event drive your decision. Remember that there are many moving parts to your financial portfolio and many times a decision in one area (say retirement planning) can affect your plans for another area (say taxes).
Most investors think about visiting an investment counselor at this time, but, their sole job is managing money. What you need now is comprehensive advice, which is provided by a true “Financial Planner.”
A true financial planner looks beyond a client’s monetary investments, and includes advice and guidance on retirement planning, education planning, estate planning, taxes, insurance and more. Why do you need this type of comprehensive approach? Because each part of your investment portfolio works together with the others to help you reach your financial goals. For example: you may not realize that life insurance can affect how you pass assets on to your heirs and the taxes they may have to pay. A financial planner will take all of this into account when reviewing your portfolio and making recommendations. It’s much easier to meet your financial goals when all of the parts of your financial portfolio are working together.
Each type of adviser has their own expertise:
Certified Financial Planner™ Professional (CFP®)
A Certified Financial Planner Professional is trained to review your entire financial portfolio and guide you through the big picture view of your financial situation. This type of planner will look at all of your needs including budgeting and savings, large purchase planning, education-, retirement-, estate-, insurance- and tax-planning. Each of these areas represents a piece of the puzzle that becomes your financial portfolio.
This ability of the CFP to look at all the parts of your financial portfolio and provide an integrated recommendation sets him or her apart from other advisors, and allows him or her to truly meet your needs – that of providing a comprehensive plan that has taken into consideration all of the moving parts of your financial portfolio.
Brokers/Investment Advisers/Asset Managers/Money Managers
Each of these titles connotes an adviser who will help you manage your monetary assets – only. These representatives are often licensed to buy and sell security products such as stocks, bonds and mutual funds. If you are a “DIY” investor, these advisers can help you with your investible assets.