Why Hiring a Financial Planner Can Be the Best Decision for Your Finances

Paying someone to manage your money seems like an oxymoron, but sometimes it’s the best decision you can make. If making large financial decisions overwhelms you or you worry you aren’t making the right choices, it might be time to get an objective opinion. A financial planner can help steer you in the right direction if you are learning how to invest, plan for retirement, or need general guidance on allocating your financial resources.

A financial planner is a financial professional who helps you make sense of your finances. They can help you assess your current financial situation and plan your future financials. Unfortunately, financial planners aren’t just a one-size-fits-all approach. Some financial planners focus on investments, others on taxes, and some on helping clients make sense of their current finances, including getting out of debt. No matter your reason for using a financial planner, they all work as fiduciaries. They operate in your best interest and not to secure higher commissions for themselves. They help you get from where you’re at to where you want to be financially by setting goals and showing you the steps to reach them.

How Financial Planners Can Help

Here are a few examples of how financial planners can help:

Saving for retirement: Financial planners can help you create a retirement plan that ensures you have enough money saved to live comfortably in your golden years.

Saving for college: They can assist you in planning and saving for your children’s education, ensuring you have the funds needed when the time comes.

Buying a house: Financial planners can help you budget and save for a down payment, navigate mortgage options, and plan for the ongoing costs of homeownership.

Minimizing your tax liability: They can provide strategies to reduce your tax burden, ensuring you keep more of your hard-earned money.

Estate Management: Financial planners can help you plan your estate, ensuring your assets are distributed according to your wishes and minimizing estate taxes.

Understanding Financial Planner Fees

Like any service, always know what they charge before you agree to use their services. Financial planners charge for their services, but usually in different ways, including:

Percentage of assets under management: This fee is a percentage of the total assets the planner manages for you.

Flat fee per hour: You pay an hourly rate for the planner’s time and expertise.

Quarterly fee: A recurring fee paid every three months, often based on the services provided during that period.

Different Types of Financial Planners

Online Financial Planning Services

Online financial planning services are a hybrid between a robo advisor and human advisor. You get the benefit of lower fees but with access to a human advisor as needed. Usually, the robo advisor does the portfolio planning and managing, but the human advisor tweaks the portfolio based on your conversations.

Local Financial Planners

Local financial planners are your traditional financial planners. You visit a financial planner in person or sometimes online, talk about your financial situation, short-term and long-term goals, and then create a financial plan. Fees are much higher for financial planners, but you get the human touch when creating and managing your portfolio.

Choosing a Financial Planner

When working with a financial planner, make sure they are licensed and have a good reputation. You may be asking yourself if it’s safe to work with a financial planner. After all, you’re handing control of your money to someone you don’t necessarily know. It is important to research and interview different financial planners before you decide to work with one. Clearly understand the fees, requirements, and review their credentials, or speak to some of their current clients if you can. This will only help save you money and time.

Thousands of Americans rely on financial planners to hit their money goals and plan for the future, so you aren’t alone. Just understand it may take some time before you find a financial planner you trust and get along with.

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