Financial planner

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A financial planner, or personal financial planner, is someone whose job is to create financial plans for their clients. Plans cover many elements of personal finance, including cash flow management, and planning for education, retirement, investments, risk management and insurance, tax, estate. Also, for business owners, business succession planning.

The work a financial planner does is (unsurprisingly) known as personal financial planning. A financial planner uses a detailed process to create a financial plan, one that is tailored to a client's specific situation, and aims to meet a client's specific goals. A financial planner considers their client's entire financial and life situation, and the ways in which the separate aspects of these affect each other.

For more, see also Financial planner, from Wikipedia, and Financial Planners, from the SEC.

Financial planning
Financial planning gives your financial decisions direction and meaning. It lets you understand how each financial decision you make affects other areas of your finances. For example, buying a particular investment product might help you pay off your mortgage faster, or it might significantly delay your retirement. By looking at each financial decision as part of a whole, you can consider its short and long-term effects on your life goals. You can also adapt more easily to life changes, and feel more secure that your goals are on track.

When hiring a financial planner, you should know exactly what services you need, what services the planner can deliver, and any limitations on what they can recommend. You should understand what services you are paying for, how much those services cost, and how the planner gets paid. Financial planners charge for their services in different ways. Some charge either a fixed fee or an hourly fee for the time it takes to develop a financial plan, but do not sell investment products. Some are paid by commissions on the products they sell. Others use a combination of fees and commissions.

Financial planners who give investment advice to their clients must register with the SEC or the appropriate state securities regulator.

Financial planner credentials
Financial planners may come from many different educational and professional backgrounds. If you are considering using a financial planner, be sure to ask about their background. If they have a credential, ask them what it means and what they had to do to earn it.

Some financial planners assess every aspect of your financial life — including saving, investments, insurance, taxes, retirement, and estate planning — and help you develop a detailed strategy or financial plan to meet all your financial goals. Other professionals call themselves financial planners, but they may only be able to recommend that you invest in a narrow range of products, and sometimes products that are not securities.

For a detailed breakdown of this veritable alphabet soup of credentials, see FINRA's list of professional designations. This offers an extensive list of the many designations that investment professionals use.

Do I need a financial planner?
You can of course do your own financial planning. However, they may be some situations in which you need professional help. For example:
 * You need expertise you do not have in certain areas of your finances. For example, adjusting your retirement plan due to changing family circumstances.
 * You want a professional opinion on the financial plan you developed for yourself.
 * You lack the spare time to do this yourself.
 * You have an immediate need or unexpected life event such as a birth, inheritance or major illness.
 * You feel that a professional adviser could help you improve on how you are currently managing your finances.
 * You know that you need to improve your current financial situation, but do not know where to start.

Certified Public Account (CPA)
A CPA, or Certified Public Accountant, is a trusted financial advisor who helps people, businesses, and other organizations plan and reach their financial goals.

All CPAs are accountants, but not all accountants are Certified Public Accountants (CPAs). The main differences between accountants and CPAs are education, experience, and opportunity.

The Personal Financial Specialist (PFS) credential allows CPAs to demonstrate their knowledge and expertise in personal financial planning. CPA/PFS credential holders have a specific experience, education and examination requirement that sets them apart from other CPAs and financial planners.

Background checks
Organizations which certify financial planners maintain a directory of their members. You can verify a financial planner's credentials as follows:


 * CFA charterholder: Use the CFA's Member Directory to verify a person’s status as a CFA charterholder and member of the CFA Institute. You can find a member's professional conduct status by following the link on the directory's page.
 * CFP® certification: The CFP's Verify a CFP Professional search identifies people who currently hold CFP certification, as well as people who are not currently certified but who held CFP certification at one time. The search results will show any disciplinary actions or bankruptcy filings within the past ten years.

You can verify a CFP's or Personal Financial Specialist's credentials with the American Institute of CPAs' License Verification web page.

Financial advisor sources

 * Consumer Resources, from NAPFA, The National Association of Personal Financial Advisors
 * Garrett Planning Network