Many people have all the time and knowledge to handle their finances efficiently. On the other hand, some people fail to keep track of their portfolios due to myriad reasons. A financial planner, also known as a financial advisor, comes to the rescue of such individuals. This article aims to enhance your knowledge about these professionals, what they do, why you should hire them, and so on.

Who is a financial planner?

• A financial planner is a professional who has a knack for helping individuals and corporations maintain their financial objectives.
• He or she assists people and organizations in increasing their net worth through careful management and investment of money based on their means and financial status.
• Financial planners, also known as investment advisors, investment consultants, or investment managers specialize in tax planning, risk management, retirement savings, asset allocation, and estate planning.

What is the role of a financial planner?
Following are several ways in which a financial planner can help you:

• Organization and management of finances: By examining your financial position and goals, they can recommend ideal strategies for achieving your objectives.
• Financial windfall: Financial advisors help you get the most of your financial windfall, such as a lottery.
• Marriage and children: They can help you glide through complicated financial issues involving previous marriages and conflicting financial personalities.
• Education: Financial planners can help you gather savings for your higher education.
• Financial crisis: Those facing a financial crisis due to any reason can benefit from the reliable services of a financial advisor.
• Retirement planning: They can help you make informed investment decisions, which have critical importance for you when you are planning your retirement.
• Career advice: You can also seek their valuable inputs regarding an upcoming career change.
• Estate planning: Financial planners play an integral role in making estate planning easy and rewarding.

What questions should one ask while choosing a reliable financial planner?
You can ask the following questions to zero in on a financial planner.

• What are your credentials?
• Can you give me references?
• What is your area of expertise?
• Do you have CFP certification?
• What are the charges for your services?
• What services can I expect?
• Will you act as my fiduciary?
• How will we settle disputes?

What are the pros and cons of hiring a professional financial advisor?
Just like everything else, hiring a financial planner has its fair share of advantages and disadvantages.

Advantages

• Time-saving: One advantage of hiring a financial planner is that they save your free time as they look after and manage your investments and savings.
• Expert advice: Be it a decision regarding student loans, retirement planning, and career change or any other major investment, you can make an informed decision with the expert advice given by your financial planner.

Disadvantages

• Cost: Depending on the type of fee charged by your financial planner, their services may drain your wallet sometimes.
• Wrong choice: You are required to choose seasoned, certified, and skilled financial planners. You could experience losses if you pick an inefficient financial planner.

How do financial advisors get paid?

• Financial planners can get a percent of your assets for managing your money.
• You can pay them a commission if they sell you a financial product.
• If you consult a financial advisor for a few questions, you pay an hourly fee.
• For basic financial plans, you can follow a fee-for-service model to pay your financial advisor.
• Financial planners working for larger brokerage firms receive salaries from their employers.