TOP DRAWER ARTICLE

Help Your Financial Planner Help You
by
HL Carpenter

Ever wonder where Tom Cruise would be without a script? Think of financial planning as your script to reach important financial goals.

But before you take the first step into any advisor’s office, do your homework. Here are three suggestions for helping your financial planner do what’s best for you.

Understand the way you’ll compensate your planner. Fee-based or commissions? Fee-based or fee-only financial planners earn money by charging an hourly rate or a flat amount for advice and ongoing monitoring of your investments.

Commission based planners may work for brokerage firms or be independent broker-dealers. Their income comes from the financial products they sell and trades they make for you.

Identify your financial needs. Your goal might be to pay off bills, save for a new home, invest in stocks and bonds, retire early or put grandchildren through college. Maybe it’s all of the above. Being clear about what you want to accomplish helps your planner set up a personalized plan.

Decide how much help you want. A properly prepared financial plan takes time and can be expensive. After the initial setup, will you want your advisor to work with you on an occasional or a continual basis? It’s up to you to determine how often you want to have your plan tweaked.

Originally published August 2005.

Last update: January 8, 2011