Why a Financial Planner Can Help
One way to get a handle on current finances and to plan for the future is to meet with a financial advisor, such as a professional certified financial planner (CFP). Plenty of people get a few months training and say they're a financial planner, but a CFP is someone who generally has a college degree in finance. These professionals must also have worked in the field for at least three years before they can get the training for the CFP certification.
You might have heard that financial planners only work with people who have a lot of money. True, there are some planners who work only with high-net-worth clients. But most will consider working with a younger person who wants to develop good habits early.
Planners are compensated in the following ways, according to the Denver-based Financial Planning Association:
Fee-only: The planner is paid on a fee basis only for consultation, plan development, or investment management. These fees may be charged on an hourly or project basis depending on a person's needs or on the basis of their assets under management.
Commission-only: There is no charge for the planner's advice or preparation of a financial plan. Compensation is received solely from the sale of financial products you agree to purchase in order to implement financial planning recommendations.
Combination fee/commission: A fee is charged for consultation, advice, and financial plan preparation on an hourly, project, or percentage basis. In addition, the planner may receive commissions from the sale of recommended products used to implement your plan.
Fee-offset: Commissions from the sale of financial products are offset against fees charged for the planning process.
Salary: Some planners work on a salary and bonus basis for financial services firms. Consumers are referred as bank clients.
One way to find planners in your area is to check the Financial Planning Association's online planner directory at
Whether a professional helps you invest your money or not, the benefit of getting long-term strategic help with your finances is that it helps many people become better informed about business and finance without having to do all the work themselves. The time it takes to learn various aspects of financial planning is one of the major forces that keep people in the dark with regard to their financial future. A long-term financial plan will also help you determine how to handle debt, particularly mortgage debt, throughout your lifetime.
Preparing to borrow for a home is a process that can produce many other benefits beyond your goal of owning a home. It's an opportunity for you to fully understand the state of your money affairs, and it will allow you to spend and invest more responsibly for the future. You shouldn't be afraid to ask for help in this process.
