• Michael DiBartolomeo

What Will a Financial Planner Do for Me?

Updated: Feb 24

Financial planning is a discipline that many people handle on their own. However, due to an increasing portfolio or an identified lack of skill in the area, people may decide to bring a quality wealth advisor in Pittsburgh into the mix.


This decision is not made overnight, which means careful consideration is required. One of the fundamental questions that come out of this process is, “what will a financial planner do for me?”


Put simply, the financial planner is there to help clients meet their financial goals by making efficient recommendations where preparing, saving, spending, and investments are concerned. Planners are professionals who have a host of industry experience, so there is a defined process they use to get the best results for their clients.


Some of the disciplines that may come under the financial planning umbrella include investing, budgeting, taxes, estate planning, and personal finance. Many of the recommendations are supported by models and tools that consider essential yet potentially overlooked variables.


Note that a planner is only there to recommend and provide solid information. The final decision always rests with the client. While some financial planners take on a broad spectrum of responsibilities, others may only specialize in one of the disciplines highlighted above.


Payment Models

Payment Models


Though what the client is getting is highly beneficial, it's essential to never lose sight of the fact that this is a service being provided. In other words, the financial planner is doing a job, and employment is always characterized by compensation.


Do not shy away from understanding how financial planners are paid. It is always in a potential customer's best interest to ask the question in the initial discussion phase. The payment model is often one of the clearest indicators of the kind of planning style used and where the concern lies.


First, there are commission-based financial planners. Those who fall under this category are much less likely to make recommendations based on a client's best interest. That's because compensation comes from successfully selling financial products that employers may offer to their customers.


Therefore, if a recommendation is made that lines up with client interest, it is very likely by complete chance.


Fee-only advisors are next on the list, and this group of people gets paid an annual percentage based on the assets under management (AUM) for their clients. It's not uncommon for financial planners to charge by the hour or by project instead. There may even be some combination of both. However, a fee-only financial planner never gets paid by commission.


Finally, there are fee-based financial planners, and these individuals combine the compensation models of their commission-based and fee-only counterparts. A common mix is to get paid by compensation, while also retaining a small percentage of AUM.


How to Choose a Financial Planner


Apart from trusting a financial planner to make adequate decisions and bring solid recommendations forward, clients are opening a very personal and sensitive area of their lives to these people.


If there is one thing that persons don't openly disclose, it is the state of their finances and exactly what they're going to be doing to remain in good standing. Therefore, it's never a good idea to pick up a new planner without ensuring complete comfort in what this person can do.


It may be a good idea to identify the credentials that a financial planner may have. Understanding the qualification and experience typically gives a reliable forecast on what is to be expected. Knowing what to do before meeting with a financial planner would be a good idea.


Any solid planner has customer testimonials and references based on past planning projects that would have been completed. Of course, there is also the subject of current clients who are pleased with the service that they have been receiving.


Of course, understanding how the financial planner charges for the services provided helps with greater preparedness.


As indicated before, a planner may take on the entire base of services for a client or there may be specialization. Potential customers must find out where the planner being considered stands on this line.


Final Remarks


It’s no secret that having a financial planner can make for some excellent results. However, this depends on who the person is, how compensation works, and the credentials present. Always collect the required information before putting pen to paper.

10 views