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With the numbers of babyboomers thinking about their retirement, we have seen a major increase in the multitude of financial advisors, financial planners and other titles (brokers, insurance rep… financial clowns 
). It is important to know what your needs are and what each of them can offer you. There is no need for a broker if you plan to be included in the investment decisions.
Depending on where you live, a financial planner can be an official title or simply someone who decides one day to add this title to his business card. This is why you must be very careful and do the research about financial planners in your area (state, province). You will discover which background is required to get the financial planner title and be in a better position to evaluate if your financial planner must have a finance background or if he completed a weekend correspondance class.
A financial planner is a finance doctor
The financial planner will answer most questions about general concerns on the following:
- Retirement planning
- Investments (asset allocation, investment strategies)
- Protection (critical illness insurance, disability insurance, etc)
- Estate planning (will)
- Tax planning (defer, divide and deduct in order to save on taxation)
- Personal finances (credit, emergency funds, martial status, etc.)
- Insurance (life insurance)
Depending on his licence, he may or may not be able to sell you insurance, help you write a will (you are better off with a notary or a lawyer for this) or advise if you should buy or sell a specific stocks (broker can do it, for financial planners, this is not automatic).
This is why we are saying that a financial planner is a finance doctor, he will be able to do an overall diagnostic but if you need a specialist for a specific topic, he will refer you to a notary/lawyer, insurance representative, tax expert (accountant most of the time), etc.
A financial planner will be of great help by looking at your overall condition and tell you what is urgent and what would be nice to do. He will write a financial plan where your situation is explained and the impact of decisions regarding your personal finances and will make written recommendations according to his observations.
This becomes your “to do list”. A financial plan is usually reviewed once a year to verify if your financial and personal situation has changed. For example, if you a child is born, your financial priorities will differ from the year before!
So the role of a financial planner is to guide you through your personal finance options by looking at all the points mentioned in this post. This is definitely a great start to build a strong retirement plan!
