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November 2016  Volume 9, Number 11        

financial planner

Is it Time to See a Financial Planner?

Seeking advice from a good financial planner is investing in your future. It might be tempting to save some money and do your own planning, but hiring an expert can cost a lot less than making a costly mistake.

A financial planner talks to you about your goals and then reviews your entire financial history — your expenses, tax rates, annual returns, family situation and even life expectancy. The planner then creates a written plan that takes into account your needs, as well as unexpected situations, such as long-term care.

How to Know if You’re Ready

If you find yourself in any of the following situations, it might be time to see a financial planner:

  • Are you afraid of making mistakes when you receive a windfall? If you’re not used to dealing with a large amount of money and you inherit a large sum or win the lottery, it can be confusing to know where to start.
  • Do you want to make more money from your investments? An expert who has closely watched the market and understands the best way to manage money can help you find ways to invest your money that you may not have considered. It’s never too early to start. Hiring a planner while still in your 20s can help prevent a lifetime of financial mistakes. Plus, the more you save in your 20s, the less you’ll have to save later on.
  • Are you interested in saving enough money for retirement? It’s not always easy to know how much money you should save for retirement. You can use an online calculator to figure out how much to save, but the calculator won’t tell you which strategies will work best for your situation. By talking to a planner, you can work together to make sure your investments will help you reach your retirement goals, such as having enough money to travel more.
  • Do you feel you need to know how to better handle down markets? Many people lose a fortune when the market crashes. And it will crash. History tells us that there is a significant down market every five to seven years. Working with someone who knows how to diversify your investments is a good start in helping you protect your money in good times and bad.
  • Have you realized it’s not cost effective to get a tax refund? It might be fun to get a tax refund, but you’re missing out on the opportunity to earn interest on the money you overpaid to the U.S. government. A financial planner can help you better figure your deductions.
  • Do you want to save time to pursue other passions? If you’re not interested in doing intensive research and actively monitoring your portfolio, a financial planner will do that work for you.

Finding a Financial Planner

There are plenty of financial planners. Make sure you find one who can provide you the expertise you’re seeking.

A financial planner who has earned the Certified Financial Planner (CFP) professional designation has passed a number of rigorous requirements set forth by the Certified Financial Planner Board of Standards, Inc. The requirements focus on education, knowledge, experience and ethics. A financial planner who has these credentials should be able to provide you with a plan that can include ways to pay down debt, assistance in making spending decisions, and advice on investments that are best for your situation.

Financial planning also is performed by investment advisors who will manage your investments.

If you’re unsure where to start, talk to your certified public accountant or lawyer for referrals. Some professional associations, such as the Financial Planning Association or the National Association of Personal Financial Advisors, may be able to assist you.

What It Will Cost

Many financial planners charge a flat fee of $100 to $500 an hour for advice. If you want them to manage your money, they may charge you a percentage of your assets, around 1 to 2 percent. There often is a discount for larger accounts. A fee-only planner may charge you $1,000 to $2,000 for a comprehensive financial plan. For ongoing advice, expect to be charged a monthly retainer fee of about $200.

Investment advisors usually charge a fee equal to a percentage of your invested assets — usually about one percent. For example, if you had $200,000 to invest, you’d probably pay the advisor $2,000 per year. Some investment advisors will offer you free advice. They usually work for a bank or large investment firm and are paid commissions on the investments they sell you.

Before deciding to work with an investment advisor, check to see if they will work with someone who has your level of assets. Some investment advisors insist you have a minimum amount to invest, which can range from $50,000 to $500,000.


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In this issue:

This Just In...

Are You Choosing the Right Health Insurance?

Is it Time to See a Financial Planner?

Life Insurance Myths Debunked

401(k) Saving Pitfalls


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