A financial planner is your money manager. He advises you of the best way to achieve your financial goals. Irrespective of your financial goals, these money experts will work closely to accomplish them.
If you work with this finance expert, your life will take a new turn financially. They analyze your financial situation and help you make decisions that could fast track your financial goals.
What’s Financial Planning?
Financial planning involves defining your financial goals in a way that enables you to know when you need the money and what you need it for and come up with a specific course of action to achieve these goals.
Again, a financial planner isn’t a magician. He can’t give you any finance-related advice without getting personal and financial data about you.
They use the collected data to project how you can achieve your financial goals. A financial planner’s projection is mostly based on realistic assumptions of inflation, ROI, your spending habits, your savings ability, and your earnings. Read more!
What Will a Good Financial Planner Do?
A good financial planner will advise you on the following;
- He will advise you on what to do differently to improve your finance;
- Based on your current financial situation, he will tell you how much to save.
- With his experience, he will advise you on the best retirement account to use
- They will tell the types of mortgage you should have and whether to pay it off or refinance
- The type of insurance and how much insurance you need to cover. In most cases, your financial adviser will ask you to cover life insurance, long-term care insurance, disability, properties, etc.
- The amount of money to keep as a precaution (emergency funds)
Depending on your contract terms, your financial planner can also advise you on estate planning and tax planning services.
Again, a good financial planner isn’t reckless. He never recommends any course of actions unless he fully understands your goal and possibly prepares a long term financial plan for you.
What’s a Financial Planner’s Fee?
Financial planners have different fees structure, here’s how are they charge their fees;
- Per hour billing
- A fixed fee to complete a particular task
- Yearly or quarterly retainer fees
- They charge a percentage of the asset they manage on your behalf. And the percentage is usually between 0.5% to 2% annually. And when you have more assets to manage, the fee reduces.
- When you buy any financial or insurance product through financial planners, they get a commission.
However, it’s advisable always to ask a financial planner about their fee before you start. And if they claim to be a registered investment advisor, ask for documentary proof. Ensure they provide you with a disclosure document (ADV). The document consists of two parts – the second parts give you detailed information about their fees and any other conflict of interest they may come up with. Click here for more details: https://www.breadandmoney.com/land-investing-five-steps-you-need-to-take-after-buying-a-property/
