6 Reasons Hiring a Financial Planner Could Be HelpfulFebruary 23, 2017
Saving money for specific life goals — whether for debts, bills, or future expenses — is a long-term strategy that sometimes requires the assistance of someone with financial expertise, even for the most financially-savvy individuals. Like most things, hiring a professional in a particular field can help achieve optimal results. Enter the financial planner.
Before getting started, first realize that a financial planner is different from a financial advisor. Generally, a financial planner is someone who helps set up some form of a financial plan, thereby solving an individual or family’s specific financial situation. Conversely, a financial advisor (also known as investment advisors and other financial professionals) is someone who helps implement a financial plan by choosing specific investments. Even professionals in the field frequently interchange these generic terms incorrectly, so it is often best to fully vet an array of practitioners before making a final decision.
Good financial planners — those who offer sound, personalized advice — could not only help consumers save a lot of money, but they might also help them reach their financial goals much more quickly. You will need to determine in which situations the do-it-yourself approach to financial planning is appropriate versus when obtaining help from a professional might be worth the cost.
First, it is always important to fully educate yourself on the details surrounding your financial plan so that you have a clear picture regarding your current situation. You are always your best advocate, even if your financial professional is reputable and honest. Since you are entrusting this person with sensitive personal information, maintaining a better awareness of your needs and goals can help you find someone that has your best interests at heart rather than someone who is simply trying to sell products.
When a Financial Planner Can Be Helpful
Financial planners are most helpful and generally worth the cost when you need help planning around these specific financial situations or life events:
Starting a Family
Starting a family comes with many financial responsibilities. Hiring a good financial planner can help you navigate, prioritize, and balance the plethora of decisions and tasks that come along with it, such as joining finances, budgeting for children, considering life insurance, estate planning, college savings, paying off any remaining student loan debts, and more.
Maintaining a High Income
If you are a high-earner, chances are you may need help navigating and taking advantage of tax-saving strategies, as well as implementing and managing various financial responsibilities. A good financial planner can help strategize a plan that allows you to focus on making money, alongside maximizing your ability to live and have the life you have worked so hard to enjoy.
If you are self-employed, then you know that you are subject to different financial questions and opportunities. A good financial planner — one that specializes in self-employment — can help you get the most out of your business (and money), as well as navigate retirement accounts, variable income, employee care, ownership questions, and business structure questions.
Coordinating a High Net Worth
Using a financial planner for a high net worth can also be beneficial, as they can help coordinate large balances across different types of accounts. The National Association of Personal Financial Advisors (NAPFA) is one place to start looking for fee-only financial planners.
Planning For a Specific Need
Using a financial planner could be extremely beneficial if you have a unique situation with unique payment or repayment needs. For example, individuals with extremely high education loan balances may want to consult a financial planner to determine the optimal debt payoff plan when you have multiple consumer loans such as auto, credit cards, mortgages and student loans in order to find a repayment plan that is most beneficial. If you have never researched how the terms of your current student loan repayment plan compare to the options that are available in today’s competitive lending environment, you should consider student loan refinancing to see if you qualify for lower interest rates and better repayment terms!
Near-retirees sometimes need help planning for retirement, and current retirees sometimes need help understanding when to file for social security, as well as withdrawing and extending various retirement accounts. A financial planner can help explain these details, as well as formulate a strategy that can help individuals maintain their accustomed lifestyles during retirement.
More Tips on Hiring a Financial Planner
Before you hire a financial planner (or advisor), remember to educate yourself, including finding out if a financial planner is right for you. Next, consult this Ultimate Guide to Choosing a Financial Advisor — it covers everything you could ever need to know to choose, vet, and decide on a financial planner or advisor. Finally, if you have student loan debt and you or your financial planner have questions on student loan refinancing, talk to the specialists at Education Loan Finance. Our personal loan advisors provide a complimentary analysis of your student loans to assist you in the refinancing of your private and/or federal student loans. Applying for better rates and terms on your student loan is also free with ELFI, and we are ready to assist you in finding the right student loan repayment program for your financial goals.