Investing Advice

Financial Planners

Financial planners are professionals who help you define your financial goals, and then develop and execute a plan to invest your money to reach those goals. The three major areas of discussion are your retirement, children's education, and lifestyle wants and needs. Insurance, both life and health, are also explored in great detail.

These consultants may work as independent planners, work for your bank, or be stock brokers or life insurance salesmen. They usually push the products that they represent and know best.

Financial planners that work on a commission basis where you pay nothing for their services usually require a starting investment nest-egg of $50,000. The planner is compensated by a sales commission from the products that they sell, such as mutual funds, annuities, and life insurance. There can obviously be a conflict of interest. Financial planners that work for banks are paid a salary and you are not charged for their service.

Some financial planners who charge you a fee for their services also collect commissions from the companies whose financial products they sell. This is okay, but it is up to you to ask about this and get in writing how much the planner will receive for services, along with the money's source. Fee-only planners charge between $75 and $300 per hour to advise you and steer you towards your best investment solutions. Expect to spend $1,000 to $10,000 for their services, depending on how much money you are investing.

Besides helping to identify your goals, the financial planner will consider your current and future income, your future income needs, how many years you have to grow your investments, and your risk tolerance. Preservation of your money is also high on the list of important considerations.

By learning about investing, you will know what questions to ask. Some people donít ask many questions because they're afraid this will make them appear stupid. But by not asking questions, and keep asking until you finally get answers that you understand and feel comfortable with, you can waste a lot of time and money.

In many states, financial planners are unregulated. Anyone can call themselves a financial planner. If the planner is certified by the Certified Financial Planner Board of Standards, they have received the CFP designation by passing a 10 hour examination covering 106 financial topics. About half taking the exam fail. There are currently about 37,000 CFPís.

Investment consultants are not regulated in any state, if they do not actually sell securities.

A good resource is Vanguardís How to Select a Financial Advisor at 800-662-7447. You can check out certified financial planners at 888-237-6275. Call there also for their Financial Planning Resource Kit.

Other Financial Planners Topics:

  1. Financial Planners
  2. Financial Proffesionals

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Who's Not Investing?

Millions marry and start families each year without taking basic steps to make sure their future, as well as their children's, is financially secure.

According to a recent survey by Princeton University and the Consumer Federation of America, 70% of households with incomes under $50,000 a year have retirement savings of less than $5,000. This same report said "most Americans are living paycheck to paycheck".

Learn more about how you can plan, save and invest smart for your family's future.

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