Personal Finance

What will a good financial planner do for me?

26 May , 2015  

Nikhil (Nik) Sreedhar
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Nikhil (Nik) Sreedhar

Founder at ProAdviser
Nikhil's dream job is to be an exotic car salesman. His favourite colour is orange and it shows as he is the 23 year old entrepreneur behind ProAdviser. You should follow him, he gets lonely.
Nikhil (Nik) Sreedhar
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Financial Planning – What does it entail?

Financial planning is the art of knowing your financial objectives, deciding when to spend your money and choosing what to use your money for.  Next, you should complete the process by making a financial strategy showing the actions and steps you will take to attain your objectives.

If you cannot plan your money, a professional called a financial planner can assist you as long as they receive your financial and personal information. Alternatively called a financial adviser, the planner uses your information to create financial projections that would reveal to you how and when you could reach your goals.

Duties of a financial planner

A great financial adviser plays the following duties when dealing with their client.

  • Decides on urgent changes.
  • Determines the most suitable home buying loan to have.
  • Computes the amount you should save.
  • Computes your most appropriate emergency fund.
  • Makes a choice on the kind and amount of insurance you require. This may involve disability, life, health, property, casualty or long-term care insurance covers.
  • Finds out the most sensible kinds of retirement annuity accounts to keep. These accounts may include ROTH, 401(K), IRA and few others.
  • The financial plan advisor identifies potential answers to your tax issues.
  • Decides whether or not it is sensible to payoff your home.
  • Computes the correct rate of return you should aim at to accomplish your goals within the stipulated time.

Note: Some financial planners may be consulted about real estate planning and tax problems.

Determining a Financial planner’s area of specialization

This is easy: just get in touch with your financial planner and ask about the duties they do.  Only work with a professional that gives written advice for future reference.

Fees: How much will you pay?

Financial advisers have different methods of pricing their services. These include:

  • A fixed rate to finish a given project.
  • An hourly fee
  • An annual retainer rate or a quarterly rate
  • A commission they receive because of acting like insurance or financial agents.
  • A mixture of fees and commissions
  • A rate computed as fraction of assets that the financial adviser administers for you. Mostly you will be charged a rate between two to fifty percent annually. The norm is that you would pay a lower fee if you want most of your assets to be manned by a financial strategy expert.

How do I know how my consultant will get compensated?

  • The simplest way is asking them to explain to you in details.

What will a great financial plan expert not do?

  • Recommend any plan of action without finding out your goals.
  • Draft a future financial strategy without asking about your financial goals first.

A top and reliable financial adviser will:

  • Gather and scrutinize financial accounts from all areas of your earnings.

Can I get advice on how to invest from my financial planner?

Investment advice has nothing to do with financial planning. So there is likelihood that you will look for a separate professional who specializes in investment consultancy. Prior to that, ask your financial adviser whether they can be consulted on given areas of investment.


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