Financial planners are professionals who assist clients in their financial planning decisions. They are required to be current with tax and investment legislation and have strong analytical and communication skills. In addition, they must be creative and innovative in their approach to improve clients’ financial situations and help them achieve their goals. Other duties include providing investment and insurance services to clients, ensuring sound client record-keeping, and establishing and maintaining relationships with clients.
Financial planners work with nearly a third of American families. According to the Investment Company Institute, there are more than $19.5 trillion in U.S. client assets under management. The majority of this money is invested in active managed funds, which are typically tax-deferred retirement accounts. This represents nearly half of all U.S. households’ total investment portfolios.
When hiring a financial planner, be sure to ask if they are a fiduciary. Some financial planners may be affiliated with investment companies and receive a portion of their fee from their sponsors. If the planner has financial ties, make sure to find out which products and services they recommend and how these products differ.
A financial planner can earn various designations in the financial planning field, such as Certified Financial Planner (CFP) or Chartered Financial Consultant (CFA). While not necessarily a government-endorsed designation, such certifications show that the planner has completed a specific education in the field and has a great deal of experience. You should also look for a financial planner who respects your input and understands your goals.
