Hiring a financial professional to handle your financial affairs is an important decision that should not be taken lightly. A host of factors and considerations will affect your choice. There are people who actually choose pay-only financial planners to manage their assets and provide investment guidance.
What is a pay only financial planner? These are financial planners who charge a specialized fee just for financial planning services and these are paid directly by their clients. They do not receive any additional compensation or commission for the services they provide.
One of the questions you should ask your pay-as-you-go financial planner is how long they have been in the financial planning business. Experience and integrity is very important as the relationship created implies trust and confidence. Knowing the track record and proven competence of your single payment financial planner is a must. It’s also important to find someone who puts your interests above their own, so look for someone who doesn’t have a conflict of interest with any company.
The academic and professional competence of a fee financial advisor is important as this will affect the outcome of their advice. This will also affect the quality of service they will provide you. Also, the more experienced the financial planner, the better, as he or she will be less likely to be affected by hard times and will have more knowledge to solve particular problems in the business.
The primary job of a pay-only financial planner is to devise a long-term investment strategy. He or she needs to ensure that this plan will be implemented correctly, so the next question to ask is your qualifications to do the job. Find out about their academic qualifications, credentials, and licenses, if any. Ask if they can handle the pressure in good and bad economic times. Demand a copy of your ADV II form to see if you have been penalized in the past or received any disciplinary action related to your work.
Another important issue is the form of compensation they expect from you. How are they compensated? This is vital in determining whether or not you can pay for your services or if you will be comfortable with the payment setup. Fee-only financial planners are more likely to give you sound, unbiased advice, as they are paid regardless of your choice of investor. Those who are commissioners may have a conflict of interest and not give you the financial advice you need.
You should also ask about the services that the flat-rate financial planner is willing to provide. Is he or she an expert in tax laws and regulations? Can he or she provide complex advice involving various financial topics? As your wealth grows, managing your assets becomes more complicated. Finding someone who can multitask might be a good fit for you.
Also ask about licenses and certifications. Planners must be registered in accordance with state and federal laws. Check to see if your lump sum financial planner meets the requirements set by your own state.