The field of financial planning refers to the financial objectives of individuals, both natural and legal. In this article we will insist on the role of the financial planner and consultant in the life of a person and on guidelines to choose a financial planner.
What is an independent financial planner and consultant?
An independent financial planner and consultant is a person who knows information from the sphere of financial goals planning (based on Maslow’s Hierarchy of Needs) and information from the financial market, to develop a strategy from the perspective of allocating personal finances, in order to achieve financial goals.
Knowing the financial situation of each person, their objectives and discussing in detail their individual particularities, a financial planner can connect this information with the financial market: economy, financial products and services for a systematic planning and for finding an optimal solution that will lead to obtaining the respective financial objective(s).
Additionally, the term “independent” gives the possibility to know more financial fields, respectively financial information that can be correlated with the individual situation of the current financial situation and the financial objectives, to create an optimal plan for each individual that allows achieving the objective in an efficient way.
The duties of an independent financial planner and consultant:
- To identify each person’s financial goals, both in terms of needs and desires
- To identify the current financial situation as a whole, as well as the future one, taking into account the individual and social-economic particularities
- To analyze the entire perspective of the financial market, both from the current and future perspectives
- To make the current financial situation known, to determine the awareness of the relationship between the client’s current financial situation and the economic situation of his community in terms of opportunities and risks
- To provide information on all financial aspects, both personal and economic
- To identify the necessary solutions for the particular situation of the client
- To create, together with the client, a plan, a course of action to follow together in order to achieve the main objective set
- To integrate in the plan secondary objectives too
- To provide individual counseling along the way and, if necessary, reorganization so that the final goal is achieved according to the plan
Therefore, your financial planner and consultant is a specialist who, like a doctor, knows your situation and offers you a customized “recipe”.
When you choose a financial planner, always look for someone who is CFP (Certified Financial Planner). CFP certification is a proof of expertise, representing the most significant credential in this business. A CPF is licensed, regulated, has adequate training on various aspects of financial planning and has passed a test administered by the Certified Financial Planner Board of Standards. Look at the Referral List for recognized financial planner experts.
You should avoid financial planners who earn money based on commission. Choose instead a planner with a payment structure based on flat hourly rate.
Finally yet importantly, take a look at the code of ethics that a financial planner adheres to. Make sure that planner looks after your best interests and keep an eye for the word “fiduciary”.