| Financial planners are more than just stock brokers - | | | | planner, you are his or her real boss. |
| they are trained professionals who have a fiduciary | | | | Evaluating Client Needs - The Foundation of Financial |
| duty to put their client's interests ahead of their own. | | | | Planning |
| Unfortunately, a minority of financial planners have | | | | Perhaps the greatest benefit of hiring a professional |
| given the whole profession a bad name, mostly by | | | | planner is that he or she has experience evaluating the |
| recommending investment products based more on | | | | needs of various types of investors. It's sometimes |
| the commission that the planner receives than their | | | | hard for us to sit back and evaluate ourselves - and, |
| appropriateness for individual clients. | | | | of course, we may not know all of the investment |
| The ease with which one can trade online and the | | | | products and tax strategies that a trained financial |
| abundance of free investment information available on | | | | professional works with on a daily basis. |
| the internet have caused some people to feel that | | | | Financial planners can take a look at their clients' |
| they don't need financial planners, but while hiring a | | | | financial well-being, goals, and risk tolerance, in order to |
| financial planner may not be the right move for every | | | | develop a truly comprehensive financial plan, that goes |
| investor, a good financial planner can be worth far | | | | well beyond "buy, sell, or hold." |
| more than you ever pay him or her. | | | | For starters, your financial planner may recommend a |
| The key is finding the right financial planner. | | | | given asset allocation. Financial advisors tend to |
| What is a Financial Planner? | | | | recommend that younger people have a greater |
| Typically, a financial planner (also sometimes known as | | | | percentage of their portfolios in equities (stocks), |
| a "financial advisor") is someone who is licensed to sell | | | | whereas older folks concentrate more on |
| stocks and other securities (bonds, mutual funds, etc.), | | | | fixed-income securities (bonds). |
| as well as insurance products. Some financial planners | | | | The logic behind this is that young people can afford to |
| may even be able to give tax or legal advice. | | | | take more risks - over the long term, the stock market |
| One major distinction among financial planners is how | | | | generally outperforms the bond market. But for older |
| they're paid. There are fee-based financial planners | | | | people, what if the stock market crashes the day |
| and commission-based financial planners. For high-net | | | | before they're set to retire? |
| worth investors, fee-based planners are probably the | | | | They don't have the time for the market to "correct |
| best fit. | | | | itself" that younger people do, so this is why financial |
| This is because you'll never have to worry about your | | | | planners generally recommend that people begin |
| planner steering you into an investment solely to line his | | | | slowly moving out of stocks and into bonds as they |
| pockets with a fat commission check - he is paid to | | | | age. |
| give you advice, not based on what you actually buy | | | | But this is just a simplified case. Perhaps your needs |
| or sell. | | | | are a little out of the ordinary. Perhaps you haven't |
| If your financial planner's advice doesn't pan out over | | | | saved enough for retirement. A good planner will |
| the long run, you're unlikely to stay with him. | | | | recognize this and recommend that you're aggressive |
| This doesn't mean that commission-based planners | | | | with your investments, even in older age. |
| are all bad. Few financial planners are able to build a | | | | Maybe you're young, but you have an incredibly weak |
| fee-based clientele directly out of college - they have | | | | stomach. You like to play it by the book, and |
| to earn their stripes, as it is said. | | | | everything you read says you should be heavily in |
| The best commission-based planners usually graduate | | | | stocks, but a good financial planner will steer you |
| to fee-based advisory, but in doing so, they may be | | | | toward big cap blue chips with a healthy dose of |
| pressured by management to leave their lower | | | | fixed-income, and your stomach will thank him for it. |
| net-worth clients behind. Truly professional financial | | | | The key is that experienced financial planners have |
| planners will always do whatever they can to | | | | seen other clients in similar situations, and yet they are |
| accommodate the needs of their existing clients, even | | | | able to zero in on your unique needs. This type of |
| if their assets are modest. | | | | financial professional is worth every penny that you |
| After all, financial planners, like doctors and lawyers, | | | | pay him, because he measures his success by your |
| have a duty to those whom they serve, not to their | | | | success. |
| employers. When you are the client of a financial | | | | |