Looking for Financial Help? Do Your Due Diligence

There’s a misconception out there that financial advisors primarily focus on investments. But while that can be one component of our businesses, it’s certainly not the only one or, in many cases, even the main one. For many planners, myself included, investments are just one piece of a large puzzle that includes several other essential areas that need to be addressed, such as cash flow, taxes, insurance, retirement and estate planning, and even career planning in some instances.

• The advisor you choose may have expertise in one specific area, or be more of a generalist, so it’s important to know what you need and what questions to ask before hiring someone to help you with your finances.

• It’s also essential to know how that person is being paid – is it a flat fee for their advice, a commission from the products he or she sells, or a combination of both?

• And what about all those letters after someone’s name? CFP, CPA, CFA, CDFA, EA, etc. Which are the most important, and why?

To help you navigate through the different types of advisors/planners out there, what kind of services they provide, how they are being paid, and what their credentials mean, here is a list of resources that can help get you started.

For a good overview of the industry and what questions to ask when you meet an advisor:

http://www.napfa.org/UserFiles/File/FinancialAdvisorFieldGuidev13.pdf

http://guides.wsj.com/personal-finance/managing-your-money/how-to-choose-a-financial-planner/

For understanding how advisors/planners are compensated:

http://www.forbes.com/sites/wadepfau/2016/05/19/understanding-how-financial-advisors-are-compensated/#74fa4d257a8b

For getting a grasp on some of the different credentials:

http://money.cnn.com/retirement/guide/gettinghelp_basics.moneymag/index4.htm

http://www.foxbusiness.com/features/2012/03/26/ea-vs-cpa-which-is-right-for.html

In addition to the above, there are also money coaches, who tend to specialize in cash flow planning and budgeting, and may have a coaching or counseling credential rather than a financial one (or, like me, they may have both!).

It can be overwhelming to know what exactly to look for when it comes to hiring someone to help you with your finances.

But don’t let that be an excuse to put it off! Do your due diligence but then TAKE ACTION, so you can start making smarter choices when it comes to your money!

Want more tips? Schedule a free consult here today!