What Is A Financial Planner?
Like lawyers, financial planners are professionals, and their backgrounds need to be examined. Some of the questions that you should ask a planner to feel comfortable before engaging in his services include:
- What experience do you have?
- What are your qualifications?
- What services do you offer?
- What is your approach to financial planning?
- Will you be the only person working with me?
- How will I pay for your services?
- How much do you typically charge?
- Does anybody besides me benefit from your recommendations?
- Have you ever been disciplined or the subject of a lawsuit?
- Can I have documentation in writing?
The effort and thought you use in choosing a financial planner has benefits which are orders of magnitude larger than the time invested. Anybody doing work for you should have a background in insurance, tax planning, investments, estate planning, retirement planning, asset protection planning, disability planning, elder law planning or be able to refer you to professionals with whom the planner works who can participate in developing your plan. It's also crucial that the planner you choose stays current. If you think law is an ever-changing field, financial planning is infinitely more volatile. Generally it's wise to choose a planner who can bring together all the pieces necessary to achieve your financial goals. It's important to know when the planner is doing this that he is respectful about investing your money and confident that the tax strategy is right for you. Make sure you are not more cautious or aggressive than the planner with whom you are working. Like attorneys, some planners work for giant organizations and others are sole practitioners. The financial planning field is virtually an analog of the legal field.
Many financial planners work for fees and commissions generated by the products that they sell. These planners usually work in larger organizations and are not sole practitioners. It's generally best to work with somebody who expects to be with you for the long term rather than for a quick sale. Commission-based planners often times have incentives that are adverse (and perhaps even perverse) to their clients. Better trained, qualified and established planners won't try to sell you a cookie cutter option. Look for somebody whose fee structure aligns their interest with yours. Don't be confused: good planners are expensive, and one way or another you're going to pay for their services. It's better that the cost be transparent rather than hidden within a commission structure.
Howard Roitman is among other things a certified financial planner and attorney working with individuals and entities on tax and investment strategies to enhance wealth and reduce risks.
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