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Factors to Consider Before Hiring a Financial Planner  

Hiring a Financial Planner

There is no gainsaying that hiring a professional financial planner to handle your financial planning comes with a lot of benefits. Studies have, however, revealed that several professionals claim to be financial advisers, and a large number of the so-called financial professionals has made it difficult to pinpoint who the actual financial planners are and the skill-sets they are expected to possess.

There are specific skills that distinguish the professional financial planners with the requisite training, expertise, and competence from those who do not possess the requirements. Thus, before you can hire an efficient financial planner and enjoy the benefits that come with hiring one, you have to be confident that the person you intend to trust with your finances and assets has the right combination of competencies and expertise required to handle your finances efficiently.

There are fundamental qualities expected of any financial planner. For instance, a financial planner is expected to possess and demonstrate expertise in diverse areas of finance such as tax, estate planning, cash flow, investment, retirement, education funding, insurance and risk management. Similarly, a professional financial planner should also be able to develop a comprehensive plan that helps his/her client determine how well they are working towards the attainment of their short and long-term goals.

A financial planner is expected to demonstrate expertise in fields of finance such as cash flow, tax, investment, retirement, among others

There is often an unstated caveat when seeking out a financial planner, and it becomes necessary to clear the doubts about specific factors before hiring a financial planner. These factors include:

1. The planner’s process of gathering information

It is trite that the whole process involved in financial planning depends largely on how well a financial planner understands a client’s short and long-term goals. The training of a Certified Financial Planner (CFP) already includes the process of undertaking a detailed data-gathering process that will help the planner present a client with a vivid and well detailed financial report and also make relevant recommendations based on the findings.

Thus, if the focus of the financial planner you intend to work with is solely on acquiring information about your investments or insurances, such a planner may be unable to develop a comprehensive financial plan for you.

2. The components of  his/her financial planning process

Financial planning is a means to an end, and not an end in itself. As such, it is essential that a financial planner has an explicitly defined planning methodology. The process followed by the planner in developing a plan makes it easier to give recommendations that are well-related and suitable for your financial needs.

Thus, it is necessary that the financial planner can develop a comprehensive and well-built plan detailing all the points that build a connection between your assets and your goals.

A financial planner should be able to develop a comprehensive plan detailing all the points connecting your assets to your goals

3. The planner’s work relationship with other professionals

The financial planner is not the only expert needed to handle your financial planning. You need a solid team made up of different professionals such as an estate attorney, a certified public accountant, etc.  Thus, your financial planner has to be a person who is a good coordinator and an excellent team player, because there are instances where the planner would have to work collaboratively with experts in other fields.

The Financial Planner isn’t the only expert needed to handle your financial planning. You need other experts, including an estate attorney and a certified public accountant on your team

4. The planner’s ability to manage issues outside his area of specialization

It may be difficult to find a professional who possesses expertise in all areas of financial planning, and so you need to know how the planner intends to supplement for areas where he/she lacks the expertise.

More often than not, the professionals will have the contact of those whose services can supplement his own and ultimately help handle your needs, but you have to be sure that the person has this right network before you proceed.

5. The communication skills of the financial planner

An ideal Financial Planner has to be one who can adequately explain the financial plans he has developed for you in simple and understandable terms. Financial planning has a lot of technical words in its vocabulary, and so your financial planner has to be someone who can break down terms to a non-specialist. The Financial Planner has to be able to explain the kind of fees charged, the strategies adopted and the basis for the recommendations given, all in simple terms.

In conclusion, asking the right questions and getting satisfactory answers from a potential financial planner ensure that you get what you are bargaining and paying for, no unpleasant surprises.

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