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What is a Financial Planner?

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This page will delve deep into how financial planners can help you work towards your financial goals, what they do, how to avail the services of one, and everything in between.

In particular, the following points will be covered:

  • What is a financial planner?
  • What does a financial planner do?
  • Financial planner certification
  • Financial planner fees
  • Financial planner vs financial advisor
  • Should I hire a financial planner?

If you have any questions or want to invest as an expat or high-net-worth individual, you can email me (advice@adamfayed.com) or use these contact options.

If you have a mind about your finances, then you might be thinking about how financial planners can help when it comes to achieving your goals.

What is a financial planner?

What is a financial planner

Quite simply, a financial planner is a professional who helps people manage their money.

A financial planner helps clients create a plan around their goals and objectives. When you set out to achieve something, it’s important that you know where you’re going and how far along the path.

For example, if you want to invest money or pay off debt, then a planner will be able to help you achieve your goals through the use of different tools and strategies.

They are also able to refer clients to other specialists in areas where they require expert advice. A good financial planner has the resources to connect you to tax experts, wealth managers, and retirement planners should you require them, and the best ones can even provide you those services themselves.

Financial planners will help clients set goals and objectives for themselves, including asking them questions pertinent to their goals such as:

  • How much money do I need?
  • How long does this goal take?
  • What resources do I need in order to accomplish this goal?
  • How much risk am I willing to take with my wealth?
  • What happens to my wealth when I die?

Using your answers to such questions, a planner can build a plan best suited to your goals and circumstances.

Personal financial planners then help you maintain to this plan by setting a budget, create a budgeting system around your expenses, track your discretionary spending and income, understand how to make smart decisions about investments, and manage taxes.

They can also help you manage your debt and pay off loans faster, or make plans to reduce the amount of interest you have to pay on them.

What does a financial planner do?

The CFB Board describes financial planning as a “collaborative process that helps maximize a client’s potential for meeting life goals through financial advice that integrates relevant elements of the client’s personal and financial circumstances”.

In other words, financial planning is something you work together with a professional to increase your chances of achieving your personal financial goals. These professionals provide financial guidance that takes into account the most pertinent aspects of your financial and personal situation.

Based on their priorities and core beliefs, personal financial planners collaborate with people and families to help them make wise financial and investment decisions that will increase their chances of attaining important life goals.

Some planners concentrate on a specific area, such as retirement savings, while others adopt a holistic approach that considers the client’s overall well-being. The financial effects of family, work, education, and physical health may be covered as well.

Additionally, even corporations can use the assistance of financial planners to create and administer retirement plans and other employee financial welfare programs.

Any of these professionals, from a personal financial planner to a corporate one, is taught to lead clients toward wise financial decisions via a disciplined financial planning approach.

As such, planners are able to use their knowledge of personal finance, budgeting, taxes, financial products, investment options, and investment markets as well as their ability to use robust analytical tools and data with the power to illustrate various outcomes to guide a client to their goals.

However, these are only recommendations. Financial planners often leave the actual decision-making to their clients. Their job only reaches as far as ensuring their clients are as educated as possible about their options and the various courses of action they can take towards their desired financial futures.

When you work with a planner, you should expect a structure of a long-term, ongoing relationship.

Financial Planner Certification

Financial Planner Certification

To demonstrate their expertise, some financial planners may obtain professional credentials like the Certified Financial Planner (CFP) certification in the United States.

Certified Financial Planners have the standard of excellence in financial planning given by the Certified Financial Planner Board of Standards Inc.

CFP experts adhere to strict educational, training, and ethical standards, and are only awarded to individuals who successfully complete the CFP Board’s initial exams. These professionals are then required to continue ongoing annual education programs to sustain their skills and certification.

The CFP Board of Standards establishes and enforces the requirements for such certification to protect standards of competence and ethics for financial planners for the benefit of the general public.

The initial CFP certification consists of four components: education, exam, experience, and ethics. Up to 1,000 hours will be needed by a CFP applicant to finish the necessary courses and pass the test.

A bachelor’s degree and financial planning curriculum are the minimal requirements for becoming a Certified Financial Planner. The candidate must adhere to the Rules of Conduct, which place the interests of the clients first, and meet the Fitness Standards for Candidates and Registrants in order to pass the ethical component.

How to Become a Certified Financial Planner in the UK

There is the Chartered Financial Planner certification, awarded by the Chartered Insurance Institute (CII), for those wondering how to become a certified financial planner in the UK.

Holders of the Chartered Financial Planner designation, which is often regarded as the “gold standard” in the industry in the United Kingdom, are by definition among the most knowledgeable and experienced advisers in the field.

Individuals who want to become Chartered Financial Planners must prepare for and pass about 14 tests covering diverse financial services topics. In the Chartered Insurance Institute’s qualification program, each exam has a specific number of “credits.”

Aside from passing exams, a CII chartered financial planner must also be a Personal Finance Society member, maintain ongoing education through a specified amount of Continuing Professional Development each year, and have a minimum of five years of relevant industry experience.

Financial Planner Fees

Financial planner fees differ as financial planners receive payment for their services in a variety of ways. Some charge a fixed fee or an hourly rate for the time it takes to develop a financial plan, but they don’t sell investment products.

Others receive payment in the form of commissions on the products they sell. Still others use a mix of fees and commissions.

Financial planner vs financial advisor

Financial planning is a holistic, long-term endeavor. Meanwhile, a financial advisor is one that is suited to more specific, often short-term, concerns.

The broad definition of “financial advisor” includes a wide range of specialists, including stockbrokers, insurance brokers, money managers, estate planners, bankers, and more. Financial advisors with a focus on securities are called investment advisors.

The most typical scenario in which you can find a financial advisor is at a bank when you ask about their different products and accounts. Financial advisors do not need a comprehensive view of your finances to offer you financial guidance or investment recommendations.

Financial planners, meanwhile, take a macro view of your overall financial health and goals, to tailor their strategies and guidance around it. A financial advisor who takes this view into their strategy may be called a financial planner as well.

In short, a financial planner is an expert that specializes in helping you create and take a long-term financial strategy. A financial advisor is a broader term that can mean anything regarding financial guidance.

Should I hire a financial planner?

Should I hire a financial planner

Financial planners can help you get your finances in order, which means that you won’t have to worry about the future. You may feel like this is something that only rich people do, but it’s actually not. There are many ways to access the financial planning help that you need and deserve without breaking the bank.

If you do not have the expertise to handle your finances, hiring a financial planner may be a smart option.

You should also remember that financial planners can help in ways that go way beyond managing investments. Financial planners can help you with many different aspects of your financial life. They can help you with:

Estate planning, which is the process of preparing for the future after you die by setting out how your assets will be distributed or managed.

Tax planning, which is how much tax you should pay based on your income and other factors (like where you live or what you do). If this isn’t done properly, it may cost you a massive fortune and legal headaches later on.

Retirement planning, which involves deciding whether or not to take Social Security benefits when retiring; what kind of retirement plan best suits one’s needs; whether or not employer-sponsored plans are right for one’s situation.

A financial planner can help you do all these things: save for the future or living abroad, plan for retirement, create a budget, invest your money wisely, and so on. They also help to protect your assets by utilizing their full knowledge to reduce the taxes you have to pay for your wealth.

How to find a good financial planner near me?

It can be hard to know when you are getting good advice. It may be worth shopping around to find the right financial planner for you.

This is why it’s important to hire a financial planner who you trust and whose advice you can rely on.

Seek out local business and investor communities, find relevant government agencies that regulate financial services, or even go online to find reviews on particular financial planner organizations or services you are interested in.

What does a robo-advisor do?

A typical robo-advisor will conduct an online survey to inquire about your financial condition and future objectives. The data is then used to provide advice and carry out automatic investing on your behalf.

Easy account setup, thorough goal planning, account services, and portfolio management are all features of the robo-advisors, and you can also find that they provide reasonable prices, informational content, and additional security measures for your investing experience.

Robo-advisors provide you with alternatives to traditional advisors that are less expensive. Online platforms can do this and provide the same services for a lot less money by doing away with any human involvement.

Additionally, robo-advisors are simpler to use. As long as you have an internet connection, you can contact them whenever you want.

Pained by financial indecision? Want to invest with Adam?

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Adam is an internationally recognised author on financial matters, with over 760.2 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.



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