If you got a toothache, you see a dentist. If your laptop is acting up, you take it to an IT guy. The point is that you go see an expert whenever a problem is presented before you that is beyond your own capabilities. So why is it then that so many people choose to handle their own finances, thinking that as long as they have a calculator and can crunch a few numbers that they can do it all by themselves? This is not to say that people in general are incapable of handling their money situation; it’s just that finances are typically a household’s primary concern. It makes sense then to allocate this sector to a professional financial advisor that can help you make the best strategic decisions.
What a Financial Planner can Do for You
If you are asking yourself whether you need to hire a financial planner, then you more than likely can benefit from one. There are all sorts of scenarios in which you may contemplate whether you need consultation from a professional. You may have been bestowed a large inheritance upon the passing of a great uncle you never knew about, gave birth to twins, sold a business or recently separated from your spouse. Whatever your specific story, a financial consultant can help you get all your ducks in a row.
A financial planner can help you determine the following in regards to your money:
- Identify realistic goals and set achievable objectives.
- Look into your current financial situation by evaluating your income, assets, liabilities, investments and taxes.
- Evaluate risk levels associated with large purchases, sales or business related decisions.
- Create a plan with incremental steps to help you achieve your end goals.
- Make investments based on a sound strategy as opposed to making investment decisions based on emotion.
Not all Financial Planners are Created Equal
The term “financial planner” is rather vague and encompasses a wide variety of professionals with a wealth of background in different aspects of financial planning. Financial consultants can generally be divided into the following four classifications:
Certified Financial Planner – Most CFPs have received comprehensive and certification training in the areas of insurance, taxes, investing, retirement and estate planning. For the most part, they are the generalists of their field and are the go-to people for issues like learning to better manage your budget or figuring out the best insurance for your needs.
Chartered Financial Analyst – CFAs are the true specialists in their industry. Earning the prestigious title of CFA requires years of schooling and passing a rigorous board exam. Unless you run a large enterprise and need to bring in an expert to give you advice on how to manage your hedge funds, a CFA is usually not needed.
Chartered Life Underwriter – CLUs typically specialize in the areas of insurance and estate planning. Most CFPs also have the CLU designation, so there is usually no need to specifically seek out the latter.
Chartered Financial Consultant – Consultants with a ChFC designation cover everything that a CFP does with the addition of advanced financial planning. The major difference lies mainly in the schooling requirements. Unlike CFPs, ChFCs are not required to complete a board exam though individual exams are required at the end of each course.
While the multiple classifications may feel like a head spinner, keep in mind that unless you have a very specific need, A CFP is often suitable for 95% of those looking to hire a planner.
Financial Planners to Consider
Bringing in a financial planner is a serious decision and not one that should be made by flipping through the Yellow Pages or picking whatever financial planning agency that happens to be the first result in the Google SERP. Consider the following individuals and their established agencies:
Matt Zagula – This CFP is the CEO of First Financial Partners and is licensed in all 50 states. The firm is a family owned company and has become well known for providing financial consultation for other family owned businesses. The business also operates as a law firm and provides a multi-disciplinary and customized approach to common financial situations, such as estate planning, asset protection and pension planning. The company never uses a singular approach and gives every client a tailor-made plan that suits his or her specific situation.
Steven Lockshin – Mr. Lockshin is the chairman of Convergent Wealth Advisors, a financial consulting agency founded in 1994. As of the end of 2013, the company has consulted hundreds of clients and managed over $11 billion in assets. Furthermore, the firm is also an independent affiliate of City National Bank. While the agency treats each client as an individual with a unique need, it always falls back on its core investment principles that include an open architecture, managing downside risks and wealth preservation.
Drew Zager – As the private wealth advisor of Morgan Stanley Private Wealth Management, Drew Zager provides fixed income management to the firm’s mid-market institutional clients. Mr. Zager has also made it on the Barron’s list of top 100 advisors every year since 2004. His company, Morgan Stanley, was founded in 1935 under J.P. Morgan and has reported $347 billion in assets under management as of 2013.
Nearly every decision you make both at home and at your business involves your finances to some extent. It goes without saying that managing your finances plays a huge impact in just about every area in your life. Having a financial planner assist you will eliminate the guesswork and make this aspect of your life more manageable.