Tips On Hiring a Good Financial Planner

If you want to retire on something more than Social Security, you should strongly consider hiring a financial planner at some point. This is a foreign concept to many people, who think someone to assist with your finances is for millionaires or at least the very well off. Nothing could be further from the truth. In fact, as an average person of average income, you can benefit from such a professional far more than someone who has more money than they could spend in a lifetime. You want to make sure your future is secure and that you don't wind up working until the day you die. But that doesn't mean every advisor is created equally. Here are some things to look for in who to hire.

First of all, it should be noted that someone calling themselves a financial planner means next to nothing. There is no law preventing someone from using that term, even if they don't have the first clue about matters of money. Before you hand your money over to someone, make sure they have some credentials to back themselves up. See what organizations they belong to. How much experience do they have in the field? Do they have any references? These are questions a good advisor should be ready and willing to answer.

There are several ways a financial planner will take compensation and they aren't necessarily equal. Some work on commission. This can be disadvantageous to the customer, as there is a conflict of interest. The advisor isn't concerned with whether or not a particular investment pans out, as they get their commission based on the sale itself. Therefore, they can be pushing investments on you that aren't necessarily in the best interests of their clients. There are also fee-based advisors. This usually works out better, but it doesn't necessarily give your advisor an incentive beyond sustaining their reputation. Still others work off a quasi-commission, taking a percentage of investment returns. All things considered, this may be the best possible form of compensation. None of these schemes are inherently bad, however. It comes down to personal preference.

Finally, look for a financial planner who can do more than give you a basic chart and a list of promising investments. You want someone who is willing to listen to you, consider your goals, and work with you to achieve those goals. You want someone who will walk you through your decisions and make adjustments to your plans as time goes on. Finding someone like this may take some legwork, but it will be more than worth it.