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In the world of personal finance, one oft-overlooked professional service is the personal financial planner or advisor. Many people don’t think they have enough money to hire a financial planner; they may think that such services are only for rich people. Others may believe that financial advisors are good only when you are looking to invest money. They may not know what a financial planner does, or they may be reluctant to “air their dirty financial laundry” with someone they do not know.
Should you hire a financial manager? Well, the answer is—it depends. A financial advisor can be a helpful tool for some, and many people happily use financial advisors. Still, working with a financial advisor isn’t free, so knowing whether the benefits outweigh the costs is essential.
A financial advisor is a professional who helps manage your investments and provides advice in areas like savings, budgeting, retirement goals and taxes. Ultimately, your financial advisor will identify your savings goals, help you create a plan to achieve your goals and check in with you frequently to make sure you’re on track.
You pay for your financial advisor’s time, expert advice and management of your investments.
The fee a financial advisor charges can vary. Some advisors charge a flat fee, which may be anywhere between $2,000 and $7,500 annually as a retainer. Some charge a fee that’s a percentage of your account balance, typically ranging between 0.25 percent and 1percent annually. Others may charge an hourly fee of up to $400 an hour.
Financial advisors and wealth managers offer similar services, helping their clients with their finances and investments. However, the main difference is that wealth managers typically only work with high-net-worth individuals.
There are many good online resources for finding a CFP, though the best way to find one is often through recommendations from others. Some tips:
Many life events can push you to consider getting help managing your finances. Some of the more popular reasons are:
You should always interview your financial advisor before agreeing to hire them. This working relationship will hopefully last a while, so you want to make sure you trust them. Some of the questions you might want to ask your financial advisor are:
You should always interview your financial advisor before agreeing to hire them. This working relationship will hopefully last a while, so you want to make sure you trust them. Some of the questions you might want to ask your financial advisor are:
Anyone can hang a shingle outside their door that proclaims them a personal financial advisor. However, your finances should only be put in the hands of someone knowledgeable and who has your best interests in mind. Here are some of the ways you can tell if the professional is the one for you:
By understanding the pros and cons of hiring a financial advisor, you’ll better understand if this is the right decision for you.
Many personal financial advisors suggest that your relationship with them should be similar to a personal physician. In general, you receive a check up every 6 months to a year from your general practitioner; financial planners suggest the same frequency to consult with them.
Just as preventive medicine can help avoid serious medical problems, the best time to see a financial advisor is before you’re in money trouble. If you pay a monthly subscription, you may not meet with your financial every month but they are available to answer questions on a regular basis.
If you are worried about your finances, consider hiring a financial planner or repairing your credit. The credit advisors at CreditRepair.com could help you fix inaccurate negative items on your credit report, so reach out today.
Note: The information provided on CreditRepair.com does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only.
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