Do You Need a Financial Planner?

financial planning

If you're planning on making major financial moves soon, or if you need a little help in planning out your financial future, it may be a good idea to consult with a financial planner.

Financial Planner Duties

A financial planner specializes in analyzing the financial fitness of each client and compiling an action plan, based on the assessment, which will help accomplish objectives. Areas of expertise include asset allocation, risk management, tax planning, retirement and college planning.

They should not be confused with investment managers, which are individuals or entities that actually make investments and manage the portfolios on the client's behalf.

Should You Hire a Planner?

There are a number of reasons why you may want to consider hiring a financial advisor.

Insurance Questions

Are you unsure about disability or life insurance, including the appropriate plan for your situation and the amount of coverage you should purchase? If so, a financial planner will be able to guide you in the right direction.

Portfolio Management

Perhaps you are risk-averse when the market is turbulent. As a result, you may easily become overwhelmed when managing your portfolio. If so, the financial planner can educate you on your asset allocation strategy and connect you with an investment manager to assist with the management process.

"When you reach a point in which you're constantly afraid that you're going to make a mistake with your investments, then you need professional advice," Raymond Mignone, a certified financial planner in Little Neck, N.Y., told Investopedia.

Basic Financial Skills

You may need assistance if you are uncomfortable with finances in general, and everything from goal-setting to budgeting and saving plans confuse or scare you.

Investment Strategies

If you are interested in investments, but unsure of how to devise an asset allocation strategy with excess income due to limited knowledge on the subject, a financial planner can bring you up to speed.

Retirement Planning

Do you need assistance transitioning from your place of employment to retirement? A financial planner can offer help with expense and cash flow projections along with emergency planning.

Estate Planning

A financial planner can assist with all your estate planning needs. This includes providing help to name beneficiaries, determining the proper course of action for unresolved debt and formulating a plan to cover funeral expenses.

Exceptions to the Rule

On the other hand, you may not need a financial planner if any of the following apply to you:

  • You need help with a basic budget because your expenses exceed your income or your spending is out of control. Debbie Dragon of U.S. News recommends that you put online money management resources, such as budgeting programs and investment calculators, to use.
  • You need help with debt management to compose a feasible repayment plan.
  • You possess a thorough understanding of finances.

If any of these criteria apply to you, check with your financial institutions to learn about free educational resources that may be available to you.

Evaluate Financial Planners

If you've decided to hire professional help, but aren't sure where to start with the evaluation process, here are some things to consider.


What are their credentials? Are they a CFP and affiliated with any professional organizations, such as the National Association of Personal Financial Advisors (NAPFA) or Financial Planning Association (FPA)?


Can they provide you with professional references? Take the list of references and check them out before agree to hire the financial planner.


Do they follow fee-based or hourly structure? The latter can be expensive, but eliminates any potential conflict of interest.

Areas of expertise

Is the financial planner seasoned in the areas that you need assistance?


Were you referred to them by your attorney, CPA or a relative? A personal endorsement is a good sign for a financial planner.


Will they act as your fiduciary?


Is there a dispute resolution policy in place? If so, what does it entail?

Choosing the Right Planner

Before selecting a financial planner, be sure that what they offer will best suit your needs. And if there are any discrepancies, do not hesitate to explore additional options and move on if necessary.

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