Nowadays it seems that when people are in the need of professional services like a lawyer, tax advisor or a doctor they will contact them and make an appointment for a visit. But when it comes to personal financial planning most individuals will put it off or may never make plans to visit a financial planner.
Maybe it is old school style of thought we may have received from the previous generation which is not to trust others with personal financial information. Nowadays finances and taxes have become very complex and it is recommended to utilize the services from financial planners if your needs warrant it. This would be especially true for those individuals that have large estates. The United States tax code is very complex and there are so many laws and regulations that pertain to them.
However, one benefit in these laws is in regards to retirement planning and setting aside funds for this purpose along with the help of a person whom is experienced and knowledgeable to help you.
Because tax regulations are so complicated and many retirement plans have certain types of tax benefits either before or after the money is received. Basically pay the income tax now or pay it later.
A good financial planner will be able to help you understand your options and make informed decisions regarding your personal finances, your financial future and income taxes. These people can present options that you may not know about now or may not know enough about. This is what they do because it is their job to know about the many retirement plans and options that area available today, set up a plan or portfolio that is best suited for you and to make sure that you do not run out of money in retirement.
A good financial advisor can also help with other important things like college planning, setting a side money in case of an emergency and also planning your child’s financial future. They will show you how to make your money go a long way.
When starting to utilize this kind of service it will be necessary to have them to access your current financial situation as well as looking at what your current needs are, your needs in the future and to determine your financial goals. They will also need to look at what your current spending habits are especially the ones that may be a problem.
This is where they could make suggestions and assist you in developing a reasonable plan to obtain your goals. However, this is not just a one-time visit then put a plan on paper and hope for the best. Nope, they can monitor it and make adjustments along the way because we all know life changes happen and your financial plan should be adaptable to it. This is what will help keep you on track.
I have a feeling that several folks out there feel that they are very capable of doing something like this on their own and in reality I think some people are, but not all. Many of us however don’t really have the discipline, ability to focus on this task over a long period of time and have the understanding of certain investment strategies to make a good return on our investments which is what a good financial professional can do.
Now I would like to discuss some things that you should also know when considering to work with this type of person. They don’t work for free. They charge a fee. The only time they may not charge a fee is when the sale of life insurance occurs, since the life insurance company will pay a commission to them. Sometimes these commissions can be quite large too.
When you meet with your advisor be sure to get more information about this. Overall they can also assist with tax guidance and estate planning needs. As well as helping help you determine your insurance needs in order to protect those you leave behind. As a consumer it is up to you to find a firm in your area and you have to make the first call to them to get started. That is why they advertise. A good advisor does not waste their time soliciting clients, instead they are helping them.
Many families lack that financial stability that a good financial advisor can help them find. This is because they will help you assess your current situation compared to what your long and short-term needs are. This is done to see where your money would achieve the best return in order to suit your specific needs with minimal risk.
Please keep in mind that these people do not eliminate the risks which could be an integral part of investing but they do help you to better calculate those risks.
There are also several other types of financial professionals that also work with or refer clients within this industry since there is a similar relationship in regards to individual money management and wealth.
I will briefly go over who these others are in case your situation may be in need of their services too. A much utilized service by both individuals and businesses alike certified public accountants. These people are highly trained in accounting and especially in the area of income tax.
Along with their skills, education and experience that are also help up to a code of ethics that they must abide to. Most of them also belong to an association or society within their state. They are regulated by the state and the laws varies between them.
An accountant, auditor or bookkeeper cannot say they are a CPA or Certified Public Accountant, unless they really are and have passed the examination for licensing or certification.
So when you are seeking out this type of service be sure to know who you are dealing with and if they are capable of helping you. Estate planning attorneys provide a service in helping people with wills, trusts, special needs trusts, if needed and probate. These types of attorneys assist and arrange the transfer of assets to the heirs and designated beneficiaries. This gives legal rights to the family after a person has passed away. A good estate planning lawyer can also help minimize taxes and fees in addition to setting up contingency planning.
You should also keep the following items in order with the assistance of an attorney regarding savings and checking accounts, brokerage accounts, insurance policies, retirement plans, partnership and business items and debt. We never know how long our time is going to be so it is always best to plan ahead and make sure you have everything in order. This will help avoid the need for going to probate court.
While we are on this topic allow me to go over life insurance. If you have a spouse, kids, debt, a business or any other need that proceeds could be used for then my all means make sure you. These policies can either cover a specific period of time or cover the entire like of an insured. Just depends on your needs and how much you are willing to spend.
The professionals I describe in this post most likely all sell insurance. Just ask them for a quote and what else may be included in the policy.
I recommend shopping around, not all life insurance policies are the same and prices do vary. For those who may have accumulated or inherited a significant amount of wealth or simply want to invest into securities, this is where a registered investment advisor can help and be of assistance with securities and investing products. This could be a firm or an individual who is practicing in this capacity and is in the business about providing advice regarding securities to their clients.
Their compensation comes from giving advice investing in mutual funds, stocks, bonds plus EFT’s (exchange traded funds). These advisors may manage portfolios for their clients. It is important to know that financial planners are also investment advisors but not all investment advisers are going to be financial planners. Some will manage everything about your financial plan, while others will just give investment advice.
Lastly, not to be confused with a CPA who is a certified public accountant there is another type of less commonly know financial services professional and they are called a CFP – Certified Financial Planner. This designation is a professional certification for financial planners from the Certified Financial Planner Board of Standards. (cfp.net).
These people who study for the certification, are highly trained and have to sit for an exam because they have met educational, experience and ethic requirements to do so.
They are very capable of handling most financial situations and developing a plan that will help their clients. A good CFP will also be licensed to sell various types of life insurance products and security investments to their clients too.
Not everyone will have a need for a financial advisor as everyone’s circumstance is different but the type I would recommend would be someone who has been in the business a long time, is resourceful and has referrals that can be provided.
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