For investors who desire advice and guidance,
Financial Planners are another category of
professionals, distinct from brokers, to
consult. They advise on analyzing your spending,
setting personal budgets and establishing
disciplined programs of saving. They also
offer guidance on asset allocation strategies
and on choosing specific investments.|
Here are some tips on choosing
- Some planners will make investments on your
behalf with investment firms (e.g., private
money managers, mutual fund companies and/or
brokerage firms). These relationships inevitably
involve a sharing of fees and commissions,
and thus may compromise the independence
of the planner's advice. If you want a primary
financial advisor who does not have the conflicts
of interest that a full-service broker typically
has, it is better to deal with a planner
who just offers advice and does not invest
on your behalf.
- Look for a planner who has Certified Financial
Planner (CFP) certification.
- Expect fees to be based upon an hourly rate
for an advice-only relationship
with a planner.
- If the planner invests money on your behalf,
they might charge you an asset-based fee,
which they split with the investment firms.
Alternatively, the investment firms might
charge the fees and commissions, and then
share them with the planner. In either case,
you should understand the fee structures
in advance and be prepared to negotiate.
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