Source: Michael Solari is a certified financial planner and principal owner of Solari Financial Planning. From personal financial planning to college funding advice to estate planning, he knows it all.
While some people understand the importance of finding a local financial planner they can trust, others continually overlook this and hope for the best.
You are not required to hire a financial planner, but those who have found somebody they trust almost always feel better about their finances over the long haul.
Like many, you may be struggling with the process of locating a financial planner in your area. You need help and are willing to take advice, but you don’t want to trust your time, money, and future to just anyone.
To put your mind at ease, one of the best things you can do is search solely for certified financial planners in your area. This goes a long way in separating the pretenders from the professionals who can truly help.
The Process of Getting Started
Before we get into some of the finer details with Solari, let’s take a closer look at what the process of getting started entails.
On the Solari Financial Planning website, the basic process of getting started with a financial planner is outlined. Here are the steps:
- Initial inquiry
- Meet to get acquainted with one another
- Data gathering
- Set short and long term goals
- Analyze and create a plan for the future
- Review your personal financial plan
- Implementation
While this process is not going to be exactly the same from one financial planner to the next, this is the basic outline of what you can expect along the way.
Hiring a Financial Planner
Now that we have all that out of the way, here are some of the questions I asked Solari, complete with his detailed answers:
1. What are the primary benefits of working with a financial planner?
The primary benefit of working with a financial planner is having someone guide you toward your financial goals. Whether the goal is to get out of debt, prepare for retirement, fund college for your children or whatever the goal may be, a financial planner should help you identify your goals, organize them, create a custom plan and help implement. It can very often be too much for an individual to grasp all the concepts and much easier to hire a professional. Once you have a game plan in place it is important to check in with your financial planner to make sure everything is on track because life changes very fast for most people which can affect their goals.
2. What are the most common mistakes people have made before hooking up with you?
I usually see 2 mistakes. The first, many people wait too late. This is particularly true with people approaching retirement. They have waited too long to save for their retirement and now have to face tough choices. If you start saving early, it can make a world of a difference in the long run. The second mistake is people not implementing the advice they receive. A survey done last year by TIAA-CREF, stated that only 1/3 of the respondents said they took action after receiving advice (https://www.tiaa-cref.org/public/pdf/TIAA-CREFAdviceSurveyExecutiveSummary.pdf). Advice seekers who do not follow through on a plan may never achieve their goals.
3. How do you suggest people find a financial planner in their area that they can trust?
There is a lot of noise in the financial services industry. It is only going to get louder as more and more baby boomers start to retire. To help filter out this noise, I first would make sure that my financial planner has their CFP(R) designation. This means they are dedicated to the profession by having passed a rigorous examination, experience and continuing education. The second criteria would be to make sure that my financial planner is “fee-only.” A fee-only financial planner works differently than a “fee-based” or “commissioned” advisor. A fee-only financial planner is paid solely by their clients. They have made a commitment to act in their client’s best interest by not accepting compensation from 3rd parties like commissions on insurance or investment products (fee-based and commissioned advisors do receive compensation from 3rd parties). Fee-only financial planning firms come in all shapes and sizes but you can search for one near you on napfa.org or garrettplanningnetwork.com. Many advisors will sit down with you for free to make sure it is a good fit for both parties.
Final Thoughts
It doesn’t matter if you are currently working with a financial planner, have never considered this, or are in the process of finding a local professional, this advice will definitely point you in the right direction.
Even if you don’t meet with a financial planner in the near future, you should now have the confidence to make an informed decision when/if you decide to do so.