Advantages of Fee-Only Financial Planning
If you are looking for investment advice, there are various kinds of financial planners to help you manage your finances. They typically range from brokers, who you pay a commission for any financial product you purchase through them like mutual funds or stocks, to fee-only financial planners whose job is to solely provide you with sound investment advice and helps you implement them. They charge a flat fee for the services offer, and they are way better than the brokers who are majorly motivated by profits and may not have your best interests at heart. The financial planner can help with the financial questions you have and break them down and show you how you could go about investing in them. From retirement planning to investment management or estate planning, financial planners are well versed in these areas and will provide you with the necessary guidance. They come with a lot more benefits that include.
Instead of trying to sell you a financial product so that they gain some commissions off of it, a financial planner will look at your whole financial picture and be able to suggest to you the specific investment vehicles that match your finances. They can sit down with you and evaluate your financial position and with that help you create a plan of action for your financial security. A broker will suggest to your expensive financial products just because they are interested in making the big profits.
For any person that is offering financial advice to people, they should be listed under a fiduciary and a fee-only financial planner is one such individual. A fiduciary is required to look at the best interest of the client and are expected to be legal and ethical in the financial relationship. They should not be motivated by just making profits from their clients but ensure they provide the with the best way forward on how they could invest their money. A broker on the other hand is not listed as a fiduciary.
You will also need to work with an individual that has professional affiliations such as that of a fee-only financial planner. Something like a certified financial planner or be in the National Association of Personal Financial Advisors. These accolades help you know that you are dealing with a professional individual who is ethical and have integrity. They give you an assurance to go ahead and trust their recommendations. With the financial planner being listed as a fiduciary as well as having professional affiliations, they will be obligated to put your best interests first.
Financial Planning is comprehensive in that a financial planner can provide total wealth management at a one-time yearly fee. They cover all the areas of financial planning and help you with the right education, the taxes you will pay and the goals you will go after as well as manage your cash for you. A broker will only be interested in the financial products they will sell to you as they are only working on a commission basis. They will not provide you with the necessary education of the things you will be investing in. A financial planner will guide you in navigating your investment financial journey. Working with such individuals is of a lot of benefits to you.