Financial Planners

Once you have gained a certain amount of wealth, you might consider hiring a professional financial planner who will:
  • Review your current financial condition.
  • Work with you to identify your financial objectives, both short term, but more importantly long term.  They will ask questions like “How old do you want to be when you retire?  What type of lifestyle do you want and where?
  • Recommend ways to achieve your financial goals, by building wealth over time.
Financial planners, unlike brokers who deal primarily with stocks and bonds, will use various financial instruments to achieve your financial goals.  Although you might seek out their services for a specific event or occurrence, such as what to do with an inheritance, most financial planners will work with you on an ongoing basis.  Among other things, they will recommend and help you with:
  • Stocks (see Stocks: Buying Selling & Researching ) and Bonds
  • Individual Retirement Funds (see Individual Retirement Account (IRA)
  • Municipal Bonds for tax free income, if warranted
  • Discuss life insurance
  • Estate Planning
  • Real Estate Purchase
  • Health and Life Insurance
  • Certificate Of Deposit (CD)
  • Set amounts you need to save to achieve your goals
  • Discuss your tax bracket and ways to reduce your taxes.  They will also anticipate tax consequences of your investments.
  • What to do with an inheritance or a sudden large amount of assets
  • How to save for college, a home, a wedding


 Financial planners are paid in one of three ways

  1. Commission Based:  These are people who act similar to a broker, and get paid a commission when you purchase a financial product, such as a stock or insurance.
  2. Fee Based:  These people work more like a lawyer, charging by the hour.  Or you can pay a fee that is a fixed percent of your assets from .75% to 2.5%.
  3. Combination of Fees and Commission:  Some financial planners use a combination, based on your goals and size of your portfolio.

Some planners are registered with the Securities and Exchange Commission (SEC)(see Stock Markets & Securities Exchanges  ) as investment advisors.  They offer a "wrap around" account, which charges a "management fee" similar to those that might be offered by mutual funds.  There are no sales fees or commission on trades and you receive one statement.  The investment advisors create and manage your investment portfolio.

Obviously, if you have a friend who has a successful financial planner, by all means meet with them.  Another way to find one is by looking at their credentials and then going to a website or directory to find one. 

  •  The most well known is the Certified Financial Planner (CFP) designation, which is achieved with a combination of 3 years minimum of experience, a 2 day test, and continuing education requirements. 
  • Another is a Chartered Financial Consultant (ChFC), and finally a Certified Public Accountant.
  • A Personal financial Specialist (CPA/PFS) combines an accountant and a financial specialist. 

Check out these Websites:  Financial Planning Association:;  The National Association of Personal Financial Advisors:;  The American Institution of CPAs:;  The American Society of CLU and ChFC: .

Before you select one make sure you understand their fee structure.  Realize commission based planners have a built-in conflict of interest, since they only get paid when you purchase something; the higher priced the investment the larger their fee will be.  Review their records and compare their clients’ portfolio records to the financial market as a whole and to those of other planners.  Ask them to give you a basic idea of how they would use your financial assets; see if you like their plan.

If you turn your day to day investment decisions over to a financial planner it is critical you have one that will keep you informed, and that you feel comfortable talking to and yes, even telling them you disagree with their recommendations.   After all it is your money.  You need to make sure you tell your planner if your goals or situations change, so they can make adjustments.  You are a team.  In the end, if you don’t like the way your money is being invested or they are not meeting your goals, change advisors.

Make sure you keep excellent records of your instructions to your advisor and your conversation, if you ever have to use them if a dispute arises (see Stock Brokers & Brokerage Accounts).