How To Decide If It’s Time To Hire A Financial Planner

There are quite a few misconceptions about working with a financial planner. At first, you might think that financial planners only work with the rich. Or, you might expect that they are just developing investment strategies for clients. However, financial planners are actually very flexible in their services and no, you don’t have to have millions of dollars to work with one.

Anyone can benefit from talking to a financial planner. And in fact, getting advice from a financial planner sooner rather than later can make a huge difference.

Choose asked John Loper, a CFP and Executive Director of Professional Practice at the CFP Council, to break down what you should know when working with a financial planner.

According to Loper, certified financial planners (CFPs for short) can often help with a variety of issues.

“CFP can help people who need a strategy to pay off loans or need ways to generate income,” he said. “They can also help young families settle into life, mid-life individuals, those who need help maximizing their retirement savings, and those who need assistance with tax planning and tax planning. legacy plan.”

But their service doesn’t stop there. Here are some other areas a certified financial planner can help with:

Loper also asserts that CFP can play a role in providing guidance on what are known as “triggering events,” – events that can lead to significant changes in income or wealth. yes. Trigger events may include, but are not limited to, large inheritances, divorce, and death.

There are several ways to find a financial planner. You may want to start by finding out if your employer offers financial planning services as an employee benefit. This could be a good, non-threatening place to start working with a financial professional. Alternatively, depending on the company’s terms, the service may be available for free through your employer.

If you’ve got a specific problem that you need help with, you can try searching for a financial planner using Zoe Financial who can compare you to a list of experts who specialize in your concerns. your.

Another option is to use PlannerSearch.org to find a specialist in your state. It will give you a list of CFPs near you, and you can also filter by characteristics like employee benefits, marriage, divorce, bankruptcy, home purchase and more.

Working with a financial planner can be a big and exciting step. Although, not everyone needs to have a regular, ongoing relationship with a financial planner, there are some circumstances where it is possible to be opinionated when receiving the input of a financial planner. Experts.

“I don’t know that everyone should hire a financial advisor, but everyone can benefit from consulting upfront to see what services might apply to them,” says Loper. “Most planners offer a free consultation. It’s not until you actually sit down and have the initial conversation that you guess what your next move is.”

You need a new look at your finances

Maybe you already have an idea of ​​your next move or how to best manage the rest of your finances. Or, maybe money management just feels really confusing and overwhelming. If you’re not quite confident or wondering if there are better next steps for you to take, you might consider consulting a financial planner. Their expertise may offer an option you haven’t considered. After taking a close look at your financial records, they can let you know if there’s something else you should prioritize.

However, Loper cautions that sometimes the next best action a person can take with their finances is to do nothing and maintain their current actions. A CFP should be able to clarify whether this is really the best thing for their client.

Trigger event has happened or will happen soon

The events that cause it, such as marriage, death, divorce and receiving a large inheritance, can have a big impact on how you manage your money – and sometimes even the progress you’re making. achieve its financial goals.

When these events occur, you might think about consulting a professional on how your cash inflows or decline in assets could affect your next financial move. your. Plus, according to Loper, as you go through different stages of your life, you begin to focus on different areas of your finances.

For example, maybe you’re getting a divorce just as your kids are about to start college – a financial planner can help you plan for your child’s tuition.

You are about to retire

Of course, you can also meet a financial planner if you need help getting started saving for retirement. But if you’re nearing retirement, it can be helpful to contact a professional to create a plan for how you’ll earn your money for the rest of your life. This can feel like a heavy burden on you even if you’re using a robotic advisor like Wealthfront or Betterment to make investments that align with your risk tolerance and goals. . CFP can help you better analyze your cost of living and your savings so you can decide on a safe amount to withdraw each year.

A financial planner can also help you spot any holes in your retirement plan. Like, maybe you’ll need to save a little more money – which could mean staying in the workforce for a few more years.

While not everyone needs to have an ongoing relationship with a certified financial planner, most people can benefit from a consultation – and some initial input – with CFP. Especially since there are so many concerns a financial professional can assist.