Do you worry about your finances? You aren’t alone. According to a study by Capital One and The Decision Lab that was reviewed in CNBC, nearly 3 in 4 American adults expressed concern over their financial situation and said that the thought of money makes them anxious. Keeping an eye on the movement of the markets or the economy can be stressful and time-consuming. Likewise, at the micro-level, it can sometimes become overwhelming to match your spending habits with your income. You may be left scrambling towards the end of the month to pay your bills if you overspend in the beginning.
Given the challenges of money management, it is beneficial to make use of an expert to help plan your finances. While some saving, planning and investing is possible to do yourself, a timely check-up by a financial advisor can help your finances be in top shape. The following article takes a close look at what a financial planner does and how you can benefit from engaging with one.
Please note that while terms such as financial advisor, financial planner, wealth manager and money manager are often interchangeably used, there are specific roles ascribed to each title. Read about it in our article on Understanding the Types of Financial Advisors and the Credentials They Hold.
What can a financial planner do for you?
1. Money management
Money management involves tracking your expenses, creating a budget, setting a savings target, and optimally utilizing the money to achieve long-term goals. The objective of money management is to ensure each dollar is spent frugally to provide the highest value for money spent. Money management sets the base for your financial goals.
How can a financial planner help with money management?
One of the services a financial planner provides is creating financial strategies to save money. Financial planners understand the power of compounding and the time value of money and can help you visualize your financial future. Their expertise and skills may be put to work to assess your finances to help you set a realistic financial goal, which is the first step towards money management. Financial planners may then take you through various options to save and invest wisely, to help you meet your goals within the time horizons you set for yourself.
1. Investment management
Investment management involves managing your portfolio of securities and financial assets (including real estate, retirement accounts, etc.) to meet specific investment goals. Investment management includes preparing a short-term or long-term strategy to acquire or dispose of portfolio holdings to optimize profits and minimize losses. The investment strategies are customized to suit your financial objectives, risk tolerance, and life stage.
How can a financial planner help with investment management?
A financial planner can explain the basic rules of investing and can help you wade through various investing options to find the best fit according to your risk profile. Financial planners can also offer you sound investment advice to make optimum asset allocations and manage your investments. Your advisor will understand your objectives, evaluate your risk-tolerance, assess your life-stage, and then draft a fitting investment plan. Financial advisors also provide services where they manage portfolios and assets by themselves and regularly apprise you of the details.
1. Tax planning
Tax planning involves analyzing your monetary situation or your financial plan to create a strategy that helps you minimize your tax outgo. Tax planning should be a critical part of your financial plan. The objective of tax planning is to lower your tax duty to consequently maximize the contributions to your retirement saving plans.
How can a financial planner help in tax planning?
A financial planner will help you minimize your tax liabilities and protect your income via tax-aversion strategies like charitable donations. Picking out investment plans that help you save on taxes such as some insurance plans, etc., may also aid in stemming your tax outgo while helping you accumulate money over time. Financial planners also help reduce taxes on capital gains, retirement savings, inheritance, and other assets.
1. Retirement planning
Retirement planning is a comprehensive process that involves determining retirement income goals and taking the necessary steps to achieve those goals. It includes identifying sources of income, assessing retirement expenses, implementing a savings plan, and consequently, managing assets and risk to achieve financial independence during one’s retired years.
How can a financial planner help with retirement planning?
A financial advisor can formulate a comprehensive retirement plan based on your income, monetary liabilities, pending years of working life, standard of living, etc., and help you get that much needed good night sleep. The consultant could also help you be focused on your savings goals and align your portfolio to reduce risk as you near your retirement.
Financial planners may additionally aid in managing your retirement accounts to maximize their benefits by suggesting suitable investments to make. They may help you enforce strategies such as rolling over your 401(k) into an IRA (or ROTH IRA), create plans for tax-advantages, and potentially evade penalties and taxes during the withdrawal of funds. They also help build protection trusts, leverage home equity, and suggest ways to use Medicaid and other government plans optimally.
1. Debt management
Debt is very rarely a good idea. Not only does debt affect your current monetary position, it also significantly hampers your financial goals. A debt management plan comprises a repayment plan, where you determine your outstanding balances, and adopt relevant strategies to minimize or eliminate the burden.
How does a financial planner help with debt management?
A qualified financial planner can guide you through effective strategies that will help reduce your liabilities, and eventually become debt-free. The specialist assesses your monetary condition, assets, and liabilities, spending habits and other factors that may impact your finances, and accordingly, can frame a personalized plan to pay off your loans. Furthemore, the consultant can also help you find ways to increase your revenue and bridge the income gap to increase savings in the long-term.
1. Estate management
Estate management involves the directing, supervising, and managing of your immovable assets, including land, commercial properties, foreign assets, etc. It encompasses management of assets when you are alive, and distribution of your assets, including retirement accounts, after you are gone as per your will. Estate management can be quite tricky given the numerous rules, tax charges, and complex procedures. Hence, it would be beneficial to hire a financial planner to ensure optimum estate management.
How can a financial planner help in estate management?
A financial professional with relevant experience in estate planning can execute tasks like arranging money-making investment tools, restructuring foreign assets, etc. These advisors also review the value of assets and keep a check on your estate taxes and penalties.
How do I hire a financial planner?
A financial planner is the custodian of your hard-earned money. Hence, it is advisable that you find a competent person who holds the necessary qualifications and certifications, and places your interest foremost. If you think this is daunting, trust Paladin Registry’s matching tool to find you a top-quality advisor in your area to help you manage your finances.
Answer a few basic questions and match with the right financial advisors free of cost! You also get free, easy access to their credentials, ethical standards, and business practices. You can review all the information and make an informed decision by interviewing your selected professionals from your own area. Click here to use the tool.
3 Reasons Investors Use Paladin Registry Services to Find a Financial Planner:
1. Replacing financial planners
Paladin Registry’s financial advisor match service helps people who are looking to change their financial planner due to reasons such as fraudulent credentials, weak portfolio performance, incompetence, unethical standards, lack of communication, contrasting views, poor business practices, etc. of their previous advisor.
While Robo-Advisors are gaining popularity, they are still in their nascence as compared to their human counterparts. While the algorithm is evolving, they are currently incapable of offering tailored solutions to meet specific investor requirements, unlike a professional financial planner.
Paladin Registry is an SEC-registered service that helps investors connect with vetted financial planners. Our platform checks all documents, advisor qualifications, and business practices on behalf of individual investors. If you are stuck with an incompetent financial planner, Paladin Registry can help you find a more suitable advisor for your needs. All you need to do is:
- Check your current management contract, and specifically, read the relationship termination clause. Do the necessary formalities and dismiss the consultant.
- Collect all your investment records, and also ask your old advisor to transfer all details of securities to your new advisor if you have already matched and finalized one. Ensure you check all details and assess if anything is missing. Do not forget to collect all cost-basis data of your securities.
If you have already ended your relationship with the old financial planner, your process is easier. You can ask your new advisor to handle all the dirty work. The new consultant will request the transfer of funds and records from your former advisor. Since the entire process is administered electronically via automated customer account transfer service (ACATS), there is a very little chance of fraud. You only need to fill out a form, and your new contract will begin.
2. First-time users
Paladin Registry’s financial advisor match service is popular among people who wish to engage with a financial planner for the first time. There are several reasons why investors need financial advisory services and come to our platform, including but not limited to:
- Managing a big inheritance
- Optimally utilizing retirement saving options
- Effectively rolling a 401(k) into an IRA
- Sound investment planning services
- Retirement planning
- Planning for children’s education
- Estate management
- Tax planning
A capable monetary consultant provides dedicated attention and expertise in different areas of financial management. The advisor consistently reviews investments, minimizes risks, maximizes profits, and ensures to serve in the best interest of the client. These experts have specialized capabilities that help to navigate complex processes and financial tasks easily.
3. DIY-ers who now need financial planners
Paladin Registry is also the prime choice for investors who were previously handling their finances themselves but have now chosen to switch to professional advice for better results. These investors will best understand the difference financial expertise can bring to their overall financial health. However, when engaging with a financial advisor, it is critical to be wary of people who:
- Misrepresent information about their competence and ethics.
- Use flamboyant pitches to set unrealistic performance expectations.
- Sell proprietary products without proper disclosure only to earn a commission.
- Use fake credentials (certifications, designations, licenses, etc.)
In this regard, Paladin Registry provides access to free tools that can be used to search, interview, and select an authentic, top-quality financial advisor. Our platform helps access credentials, rate advisor quality, conduct interviews, eliminate fake advisors, establish performance standards, evaluate advisor costs, etc. Paladin Registry also provides an exhaustive advisor dictionary of terms, as well as a guide to FINRA, SEC, and BrokerCheck to find the perfect match for you.
In case you are looking to replace your existing financial planner, considering engaging with one for the first time or wanting to shift your financial stress to an expert, you can visit Paladin Registry’s free advisor match services to find a reliable guide. Our search registry will help you access their certifications and financial capabilities to determine their authenticity so that your financial goals do not have to be compromised.
To learn more about the author William Hayslett view his short bio.
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The blog articles on this website are provided for general educational and informational purposes only, and no content included is intended to be used as financial or legal advice. A professional financial advisor should be consulted prior to making any investment decisions. Each person's financial situation is unique, and your advisor would be able to provide you with the financial information and advice related to your financial situation.