Need a Financial Planner? Get Your Money's Worth
By Acceler8now.com Investing Education Team September, 2007
Using the services of a professional financial planner could help you chart a viable course to financial success and to move more speedily in the process, but that's if you choose a planner that can really deliver. Given that financial management and investment literacy is not available to a large segment of our society, a good way for more of the populace to take advantage of financial management skills is by availing themselves of the professional expertise of trained financial management professionals. One area of such skill is in personal financial planning - that process of defining and meeting an individual's financial goals, through the proper management of his finances. Financial planning is more than an act of wisdom, because it incorporates the application of tested professional principles and tools that potentially guarantee success in attaining strong financial health and also help make the process less traumatic. A personal financial planner is that professional that can help people plan the various dimensions of their finances, with the overall goal of achieving the desired financial success. Some of the key areas of attention include: income planning and budgeting, financial goal-setting, investment planning, family education planning, cash flow and debt management planning, retirement planning, estate planning, risk management and insurance planning and tax planning. Actually, the totality of a person's financial direction can be worked on by a trained financial planner.
Why Use a Professional Planner?
Engaging the services of a professional personal financial planner is not a compulsory requirement. Individuals who have the knowledge can plan and organise their finances with the help of a financial plan. Persons that do not have such skills (we all don't have the same training), may also choose to muddle along. The reality is that using a good professional is like any other investment: it is done in the expectation of good returns. Such returns are expected for the reasons that the professional should deliver:
- quality professional planning, especially as many individuals may not find the time or have the skills to tackle this all-important activity that can bring substantial financial advancement;
- a more holistic approach to financial management. By virtue of training, such professional knows the key issues that count in the financial health of an individual, some of which can be overlooked ordinarily, to the potential detriment of the individual;
- the proven tools of financial engineering that can fast-track growth can be deployed for the beneficiary, who otherwise might keep fumbling along and missing readily available opportunities that he has no knowledge of or has no access to the tools that can convert them to personal financial advantage;
- he has professional interaction with other knowledgeable peers and is, under normal circumstances, likely to stay abreast of financial and other economic issues that impinge on the financial success of individuals. His clients will benefit from that scope of knowledge and currency;
- because he provides a paid service, he can take the process to a much higher level than the individual will bother to undertake on his own. That quest for financial success becomes more elevated in priority as even the person who pays for a service becomes more committed to the implementation of the plan that results. Monitoring is also reinforced.
So, well-considered, the use of professional personal financial planning services could prove very valuable. Such professional services get wider patronage in more advanced economies like the US, where financial planning and issues of personal finance management are more widely taken advantage of by citizens. Wising up financially is one way to get out of the poverty quagmire that presently bogs down our citizenry. Individuals who learn to pay attention to personal finance management will more easily extricate themselves from the poverty web. Learning too to use expert skills provided by trained professionals in this process will fast-forward progress for those who do so.
Choosing the Right Professional
While using a professional could help, getting to find one that knows his onions may not be easy or taken for granted. There are charlatans in all fields. Crooks in professional clothing are also a risk. Dealing with the wrong party could prove expensive in terms of the risk of loss of capital (being misled to invest through a fraudulent professional) or the failure to get good value, even if no fraud is intended. The way out is to be circumspect in all financial dealings. Specifically, the following red flags should alert you:
- questionable professional training. If you are not sure about that background, you should ask questions and seek proof. Ask for credentials. Go ahead only if satisfied - after all, this service will cost you.
- no proof of legitimacy of operation. The way to start is to ensure there is licensing for a professional service by the appropriate regulator. When it comes to issues involving your finances, be sure to deal with reputable parties. Don't ever toy with your financial resources and don't be misled by bogus offers that may be designed to weaken your guard;
- unwillingness to answer questions or provide information. When it comes to that, you should watch it. There should be clear transparency in dealing with you;
- abusing other clients' confidential information. This could be part of trying to win you over, but note that this is how your own information will be exposed to other parties.
- not showing thoroughness. If recommendations are made without digging into your circumstances - a one-cap-fits-all solution is offered - you need to be wary. Good professionals justify their fees with solutions that consider personal situations, not a plug-and-play one.
- reluctance to document. If agreements and documentation are not available, or service is offered without any intent to commit to formal records, that's a red flag.
- no specific benefit statement. What to expect as the outcome of the service should be made clear enough. It may prove an exercise in futility to subscribe to a service without a clear-cut statement of expected benefit.
The may not be all that should warn you of potential trouble, but they are important signals not to ignore. The watch-word, as in every dealing concerning finances and investment, is due care. Working with real professionals can bring a lot of benefit and accelerate your success. Whether you choose to do it yourself or enlist help, what is most important, though, is to get it done. Your future is too important to be toyed with. Don't leave it to chance.
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