Business InsightFinance

What Does A Financial Planner Do? And Do You Need One?


You’ve got financial questions. The internet has answers. So do your friends, family members and late-night TV money gurus.

But sometimes you need a professional who can offer financial advice that’s tailored to your needs. That’s where a financial planner comes into the picture.

A financial planner guides you through your current financial needs and long-term goals. That typically means understanding what you want your money to do for you (both now and in the future), assessing your financial situation, and helping create a plan to get you there. Financial planners can help you pay off debt, reduce spending, save and invest for the future.

But financial pros are like doctors: Some are specialists in defined areas, such as managing investments or taxes. Others, like certified financial planners, are general practitioners, offering advice on everything from investing to insurance to budgeting and retirement planning.

Do you need a financial planner?
In general, the more complex your financial situation, the more likely you are to benefit from a financial planner.

If your finances are simple, you may be able to get the required help for free. There are plenty of resources for free and cheap financial advice, which tell you where and how to save for your goals.

Types of financial planners
Robo-advisors
Robo-advisors manage and build a portfolio of low-cost investments suited to your financial goal for a small fee — many top alternatives charge 0.25% or less of your account balance.

Traditional, in-person financial planners
A traditional or in-person financial planner may be a better fit for those with ongoing and complicated planning needs. A CFP can provide one-on-one, holistic, advise for the most complex financial situations. The official CFP designation indicates that a provider has gone through a rigorous formal training and testing process.

Online financial planning services
There are many online planning services that combine computer-driven portfolio management with access to human financial advisors. Many of the times, you’ll get a dedicated financial planner and a comprehensive financial plan. However, you’ll meet with that advisor via phone or video conference rather than in person.

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