Some Things that you Should Know When It Comes to Financial Planning
Compared to someone who is calling himself a CPA or a doctor, just anyone may call himself a financial planner or perhaps a financial advisor, irrespective of one’s educational background as well as the professional experience. Moreover, not all are actually unbiased in their advice and not all would act in their client’s best interest. To be sure that your financial planner is qualified when it comes to personal finances and also impartial in his or her advice, then these are the things which you should consider.
Make sure that one has the financial planning credentials. Getting that credential in financial planning, like the certified financial planner or a personal advisor or financial specialist would confirm that such professional that you intend to work with has surely acquired the education and also the experience needed for serving as a financial planner. The PFS and CFP credentials are actually awarded to only the individuals who have certainly met such certification requirements of education as well as experience in planning for one’s personal finances. Aside from this, they have to pass such certification exams and also must adhere to the practice standards and also the continuing education requirements.
Those financial planners are planning professionals as well but they don’t have to be experts when it comes to the subject matter. For example, a financial planner may have the skill in the tax analysis and planning but unlike the EA or the CPA, one may actually not be an expert on the tax rules. One may also have the skills in chalking such investment plan but unlike that Chartered Financial Analyst, one may actually not be an expert in the subject of investment. You have to be sure that you really work with a financial planner who is an expert in the subject matter especially in the areas of personal finance which is very important for you to be able to achieve your financial goals.
Also, it is very important that you must go through the fee structure. Such would greatly determine whose interests actually serve best, if such is of the client or your own. Fee-only professional would actually charge fees for the advice but that fee-based professional doesn’t only charge fees but would earn some commission, financial incentives as well as the referral fees on the products and solutions that they suggest to you. The advice obtained from that fee-only professional is not biased and this is in your best interest unlike the advice given by the fee-based financial planner. Make sure that you are working with the professional which has a conflict-free fee structure and aligned to the benefit you want to enjoy.