Who Needs a Certified Financial Planner!
With all the information one can get about insurance and investments on the internet, who needs a Certified Financial Planner!After all if you just want term life insurance, there are plenty of sites that can give you quotes from a number of leading life insurance companies. If you just simply want to find comparative performance information on mutual funds, you can get it from Kiplinger, Forbes, Money Magazine or Morningstar. Finally, if your employer offers a matching 401k program, you can pick a fund that is geared to coincide with your anticipated year of retirement.
Besides some Certified Financial Planners charge fees for their time, others make commissions on what they sell and the balance charge both fees and collect commissions.
Are Certified Financial Planners really worth what they cost?
Well first, it really depends on what you want to accomplish and what you can and you are willing to do for yourself? Have you tried designing a comprehensive plan that addresses all your concerns? If not, why not? Is it because you don’t know where to begin?
If your answer to the last question is yes, then you should consider hiring a Certified Financial Planner.
Certified Financial Planners earn their designations by passing a comprehensive two day 10 hour exam. that tests their ability to apply financial planning knowledge in an integrated format. The exam covers the financial planning process, tax planning, employee benefits and retirement planning, estate planning, investment management and insurance.
CFPAÃ¯Â¿Â½ professionals must also be able to demonstrate that they have at least three years of experience in the area of financial planning before they can use the CFPAÃ¯Â¿Â½ certification marks. They must also be able to show that they possess financial counseling skills in addition to financial planning knowledge.
Once certified, CFPAÃ¯Â¿Â½ practitioners are required to maintain technical competence and fulfill ethical obligations. Every two years, they must complete a minimum 30 hours of continuing education to stay current with developments in the financial planning profession and better serve clients.
Given what your concerns are and what you want to accomplish, a Certified Financial Planner should be able to help you determine what your priorities should be and help you define goals that are SMART – specific, measureable, attainable, realistic and time driven?
Then, he can show you how you can get from where you are now to where you would like to be in a year, five years from now or by the time you retire. By reviewing your tax returns, employee benefit programs, personal insurance plans bank statements and investment programs, he or she can help you design a plan that can help you meet your most fundamental goals.
A good comprehensive plan should also take into account how comfortable you feel about investing in the stock market, how much you can afford to lose, and what you will most likely do if your portfolio loses 20% or more of its value anytime during the course of your life. After all, the last thing in the world you would want to do is buy high and sell low. That is why you need someone who can help you invest in a diversified portfolio made up of a variety of tax deferred, taxable and tax free plans that will offer maximum returns for limited volatility. This program should give you the access you need for cash if an emergency arises, guaranteed and fixed income you will need after you retire and growth that can serve as a hedge against inflation during the course of your life.
It should also take into account what you want to leave for your spouse, your children or anyone else you love and cherish after your death.
Finally, it should provide you the income you will need in the event of your disability as well as provide you protection against asset depletion if you or your spouse needs long-term care.
As you can imagine designing a plan like this can take many hours of thought, planning, and research. It also takes a certain degree of wisdom that you can only develop with experience. Finally, it requires a certain degree of detached objectivity that most people seem incapable of demonstrating when they are left to make decisions that are going to impact not just their financial future but those of the ones they love.
The bottom line is do you have the time, the patience, the knowledge, objectivity, wisdom and skills to design an ideal plan for you and your family? Are your ready to admit that you don’t know everything you need to know and that you need direction? Is it possible that a professional can help you do a better job than you could do as a layman? If your answer to the last question is yes, then I think you owe to yourself and to your family to find a Certified Financial Planner that can help you determine and define your goals and help you get from where you are now to where you would like to be.
After all, as Confucius once said, “A journey of a thousand miles begins with a single step.”