How a financial advisor can help you achieve your goals

What is Financial Planning?

Financial planning is the process of setting your financial goals. This may involve understanding when you will need to use your money and how you will use it. Some goals are defined, with milestones along the way to those goals. You then create an action plan that outlines the steps you need to take to achieve those milestones and goals.

What does a good financial advisor do?

A good advisor can identify and provide advice on all of the following:

• Things you may need to do differently to save money
• How much money you should save for retirement
• Types of retirement accounts you can choose from (for example, IRA, Roth, 401(k))
• Whether the mortgage you have or want is the best for you, and whether you should pay it off completely or refinance the existing one
• If you have the right type of insurance and how much you may need (this includes life insurance, long-term care, disability, and sometimes property, casualty, and health insurance)
• How much money you should keep in an emergency fund based on your lifestyle
• Some changes that could improve the amount of money you pay in taxes
• The rate of return you will need to earn to meet your goals within a certain timeframe
• Whether it is better for you and your circumstances to downsize early or later in life
• The level of investment risk that suits the types of accounts you have

Financial Advisor Fees

You will find that there is a range in fee structures. Advisors may vary in how they charge for their services:

• You may pay an hourly rate for basic services.
• An advisor may charge a flat fee for completing a specific project.
• If you plan to see them frequently, the advisor may charge quarterly or annual fees.
• The advisor may charge a percentage of the assets they manage on your behalf (typically this fee ranges from 0.5% annually to 2% annually; the more assets you have, the higher the fees)
• Many advisors are compensated with commissions from financial or insurance products you purchase through them.
• You may sometimes see a mix of fees and commissions.

Investment Advice

Some advisors also offer investment advice and investment management services in addition to financial planning. Investment advice can range from general recommendations on an asset allocation model you should follow to specific recommendations about which investments to buy and sell. Be sure to ask the advisor if they provide specific investment advice or only offer planning services.

Source: https://www.thebalancemoney.com/what-will-a-good-financial-planner-do-for-me-2388442