What You Should Look for in a Financial Planner

Why hire a financial planner?   Anybody can give you financial advice; many people probably do – from your mother to your friends and co-workers. However, although these people may give you some form of financial advice, a true financial planner is an expert in his or her field. A financial planner is someone with experience in the market, who understands investments and dividends, and knows the right way to steer you forward to ensure that your money starts to work for you and grows itself. Keeping money just in a bank is a horrible investment strategy as you only get a few percentage points back whereas other kinds of investments have much higher yields and allow your money to become self-propagating.   Hire an expert   Although anyone can give you financial advice and some people may even market themselves as financial planners, the most important thing you need to investigate in a potential financial planner is whether he or she is certified. A certified financial planner is someone who has both the experience and a certificate showing that he or she can do what is claimed. It’s not just enough for people to say they know how to manage your money; with certification it is evidence that they actually do know how to successfully handle your money.   How is your financial planner paid?   This is one of the most important aspects for you to consider in a potential financial planner – how are they paid? Financial planners who are paid based on commission off of what they bring in for you are far more likely to be vested in making sure your investments pay off. A financial planner who gets paid at a set hourly rate regardless of qualifications is simply not as personally invested to do well with your portfolio. Think of it this way – your financial planner’s money is also on the line when he or she is paid on commission. This can be a great incentive for him to work his hardest and do the best work to ensure that your investments grow.   Hire right   It’s also an important aspect to look at their code of ethics that they work by, if any, to establish whether it is within their work practice to ensure their hardest that no harm comes to your investments and that they serve to protect your finances. But if you find a financial planner who is personally vested, is an expert in his or her field, and is certified, then you have found a financial planner who can help you secure your future.   Sources   http://guides.wsj.com/personal-finance/managing-your-money/how-to-choose-a-financial-planner/ http://www.investopedia.com/terms/f/financialplanner.asp

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