Evaluating Your Options: How to Find the Best Financial Planner
Submitted by Danielle Miura, CFP®
Founder
Spark Financials
Financial planners can provide various services to help caregivers manage their money and help them make the best financial decisions for their families.
In addition, they can offer a range of financial planning services, from retirement planning to budgeting guidance to estate planning.
Picking the right financial planner that understands your needs is vital — doing so means you won’t end up paying for services you don’t need or working with a planner who doesn’t understand the complexities of being a caregiver. Here’s how to find the right financial planner for you.
What Can A Financial Planner Do For You?
In addition to ensuring that your assets are invested appropriately, financial planners can help solve specific financial questions that pertain to family caregivers.
Financial events that may warrant advice from a financial advisor:
- You have a significant life change, like you became a caregiver, got married, had a child, or had a health scare.
- You gain considerable income, such as inheriting a large sum or getting promoted.
- You plan to retire soon or quit your job to be a full-time caregiver.
Depending on the financial planner’s expertise, they can offer a range of services that give you a comprehensive view of your current financial situation and advice on moving forward in your financial journey.
Financial Planning Services Examples
Retirement Planning
Retirement Planning can help you envision what your ideal life will look like when you are financially independent and help you create sources of income to support this ultimate goal.
Estate Planning
Estate Planning can help review your estate documents, collaborate with an estate attorney to ensure your wishes are written appropriately, and educate you about your role as part of your loved one’s estate plan.
Tax Planning
Tax Planning can help you create strategies to reduce your taxes so more money ends up in your pocket.
Budgeting Help
Budgeting support can help you create a budget that limits unnecessary fees, accounts for significant expenses, and enables you to save for your financial goals.
Debt Management
Debt Management can help you create a plan to pay off your outstanding debts efficiently.
Investment Advice
Getting solid investment advice can help you create an investment portfolio that meets your desired risk, time frame, and financial goals.
Insurance Evaluation
Evaluating current insurance policies can help identify gaps in your coverages, and recommend new insurance policies if needed.
Understanding the Different Types of Financial Advisors
The federal government does not regulate who can call themselves financial planners.
Unfortunately, the term has been a blanket term for many finance professionals, and not all have your best interests in mind. Therefore, evaluating your potential financial planner is essential to see if they are a good fit for you.
Regardless of whoever you decide to work with, it’s helpful to understand how they earn money; this will help determine whether their recommendations are best for you or their wallets.
Commission-Only Financial Planners
Commission-based financial planners earn sales commissions by selling financial products such as mutual funds, annuities, and life insurance. Because these planners make money from a third party, some may advertise themselves as free.
Suppose you decide to work with a planner who earns sales commissions. In that case, it is vital to be extra careful because commission-based advisors are incentivized to sell you products with higher commissions rather than make recommendations that are best for you.
Fee-Only Financial Planners
Fee-only financial planners earn money from the flat fees that they charge for their services. These fees may be charged as a percentage of assets or a predetermined flat or hourly rate.
Mostly all fee-only financial planners are fiduciaries, which means they are legally bound to make recommendations in the best interest of their clients. Generally, these planners choose this business model to limit conflicts of interest with selling investment and insurance products.
Fee-Based Financial Planners
Fee-based financial planners earn a pre-stated fee from their clients plus a commission through selling products or making investment transactions. As a result, these advisors can have conflict of interest issues similar to that of a commission-only financial planner.
Robo-Advisors
Robo-advisors provide low-cost investment management services. However, the disadvantage of robot advisors is that they need to give you specific advice or help you plan for your future.
Like a 401(k), the advisor will ask you questions and then build a portfolio based on your risk tolerance and goals. The program monitors an investment portfolio and makes changes when needed.
How to Find a Financial Planner
Financial planners come in many forms; therefore, finding one you can trust is crucial to leading you in the right direction.
When looking for a financial planner, you can ask friends or family for recommendations, or you can look for one online. In addition, many financial associations provide accessible databases to find a financial planner near you:
- NAPFA (National Association of Personal Financial Advisors)
- FPA (Financial Planning Association)
- Garrett Planning Network
- XY Planning Network
- ACP (Alliance of Comprehensive Planners)
When evaluating your prospective financial planner, consider their experience and credentials. In addition, you can review any disciplinary actions or complaints against a financial planner using FINRA’s Broker Check.
Questions to Ask A Financial Advisor
For you to be prepared for your first meeting with a prospective financial planner, here are some questions to help you learn and understand who you are planning to work with:
- How are you compensated?
- What services do you offer?
- How can you help me reach my financial goals?
- Are there any conflicts of interest that we have not discussed?
- Are you held to the fiduciary standard at all times?
- What professional designations do you hold?
- Do you have any assets or income minimums?
- How many times and how often do we meet?
- Are you willing to collaborate with my other advisors, like a CPA or attorney?
The Bottom Line
Because of the diverse types of financial planners, finding the right one who meets your financial needs is vital. Once you find the right planner, they can help you navigate difficult economic decisions and help you create a plan to reach your financial goals.
Danielle Miura, CFP®
Spark Financials
Danielle Miura, CFP®, is the founder of Spark Financials, a life and financial planning firm specializing in helping family caregivers manage their money.
As a CERTIFIED FINANCIAL PLANNER™ professional, Danielle specializes in comprehensive financial plan development, financial education, and financial research.
