Hiring a financial planner is not a small decision and not one to be taken lightly. There are many things to consider, and many pitfalls to avoid, so you must choose carefully. Find a planner who puts your interests first can put on the path to a secure financial future. Choosing a financial planner who thinks only of its committees can jeopardize your financial future.
Before you even start looking for a financial planner, take the time to write down some important questions. Get answers to these vital questions must be an important part of the interview process for each financial planner you are considering. How the planner answers these questions determine in large part this financial planner deserves to get your business.
How are you paid?
This is perhaps the most important issue of all, because the answer will determine whether your F.P has a conflict of interest. By their customers (only you) are compensated only by financial planners only. They do not earn the investment income they recommend, and receive no commission when you buy a particular investment fund, annuity or shares.
This independence allows financial advisors only have an unbiased opinion because they are paid the same regardless of the investments they choose. For its part, the Commission based solely on their recommended income investments. A financial genius is not required to recognize the conflict of interest inherent in this arrangement. While a commission-based financial planner can provide sound advice, it is important for clients to understand the potential for abuse.
Tariffed financial planners combine elements of costs that planners of planner elements with the commission. Like tariffed planners, planners’ rates earn commissions from the products they recommend. And the costs of planners, which are paid by their customers. Tariffed financial planners therefore have the same potential for conflict of interest as their commission does.
How long have you been in business?
This is an important issue because the financial planner you choose must be able to manage their financial future through good and bad times. A financial planner who has never mounted a bear market could panic and sell to the bottom, while a more experienced planner will recognize that the bear markets are the same for the course in the financial world.
You can also dive into the background and education of their potential financial planner because both can have a profound impact on the quality of advice and the level of service you receive. An advisor who has graduated with honors from a college should be able to provide excellent advice and guidance, while only a birdie on a lower level school may not be as competent.