News & Resources

What Is a Financial Planner?

Nov. 11, 2011
3 mins
Three people huddle around a laptop computer

Financial planning: it sounds dead easy, right? So why would you pay someone to plan for you when you can do it yourself? Besides, isn’t the money you’d spend on a financial planner better off in the bank with all of your other savings?

Think financial planning is easy, but don’t have the funds to prove it? Listen up.

What is a financial planner?

A financial planner is a trained professional who can help you manage your financial affairs so that you meet your life goals when and how you want to. A financial planner is the most important person in your financial network. Choose the right person and they can put you in touch with everyone else you need to know, from investment advisors to accountants.

Basically, a good financial planner will make sure that all of your financial needs are taken care of. Certified Financial Planners (CFPs) are trained in six areas of financial planning: As experts, they look at the big picture and make sure that all parts of your financial puzzle fit together.

  • Asset management
  • Financial management
  • Estate planning
  • Risk management
  • Retirement planning
  • Tax planning

When do I need a financial planner?

If you live alone, have $5 dollars to your name, and find yourself dreaming about winning the lottery or getting an inheritance from a long lost cousin, you might not be the ideal candidate for a financial planner. Typically, financial planners work with clients who have portfolios of $50,000 or more. As a general rule of thumb, if you think you have enough investments, and question whether or not you could be doing something more with them, then you could probably benefit from a professional’s advice.

What to look for in a financial planner

Since the person you choose to work with will be managing all of your hard-earned money, you want to make sure you pick the right person.

Besides asking the usual what-are-your-qualifications type questions, make sure the person you choose has these four qualities. It’ll make all the difference in the world. If the person you choose is lacking any of these four qualities, they might not be the best choice since each of these skills plays an important role in solid financial planning:

  • Effective communication skills
  • Strong time management skills
  • Excellent organizational skills
  • Enthusiasm
Penelope Graham

A first-time homeowner and newbie investor, Penelope Graham is the quintessential millennial, navigating the world of personal finance and wealth management. A self-professed monetary policy nerd, she follows the often-controversial housing market closely and specializes in mortgage, credit card and personal finance news.

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