What is a Financial Planner?

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  • Written By: Deborah Ng
  • Edited By: Niki Foster
  • Last Modified Date: 12 November 2019
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It's a financial planner's job to give advice pertaining to personal finance, investing and money in general. Unlike stock brokers and other professionals, a financial planner does not receive any sort of commission for his advice. Instead, he's paid a monthly fee such as that earned by an attorney or accountant.

Financial planning isn't only about investing. If a person is looking to make a lot of money in a short amount of time, he's probably not looking for a financial planner. A financial planner's goal is more long term, to provide realistic advice to keep a family secure well past retirement age. A financial planner can perform several different roles depending on his licenses and certifications. For instance, if a financial planner wants to sell stocks or insurance, he must go through all the proper legal channels to do so.


There are those who would like to enlist the advice of a financial planner but are concerned that they'll be relinquishing control of their finances to another individual. This couldn't be farther from the truth. It's a financial planner's job to guide, not to take over. While it may be in a person's best interest to follow the advice of a financial planner, he's under no obligation to do so. A good financial planner will work with the other professional advisors in your life to become part of a team. If you regularly seek the advice of attorneys and accountants, your financial planner will also work with these professionals to keep your best interests at heart.

If you're interested in choosing a financial planner, it would be a good idea to first identify your long term goals and priorities. Begin your search by asking friends, co-workers and relatives for recommendations. When you have a list of potential financial planners, check their credentials. Look for an experienced professional who is certified. You can check to see if there are any black marks against a certain financial planner through the Certified Financial Planner Board of Standards, Inc. They're online and easy to find.

Don't forget to ask your potential financial planner about background and experience. Find out about schooling and past employment. Don't be afraid to ask for several references. When it comes to your financial future, you can't be too cautious, and a reliable financial planner will be more than willing to provide such information.


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Post 2

Latte31 - I agree with you that a fee based planner is the best way to invest. Every time I think of commission based planners that earn a percentage of your portfolio I can’t help but think of people like Bernie Madoff.

If Bernie Madoff had been a fee based planner instead of a commission based planner then most of the people that invested with him would still have their money today.

I know that he is an extreme example, but people like him give other financial advisors a bad name and makes people less trusting.

I know financial guru Suze Orman actually discourages people from using financial advisors and encourages them to learn about their money themselves because she feels that no one is going to care about your money the way you do.

Post 1

I just wanted to add that a financial planner’s salary can come from the fees that he or she charges or the percentage of the assets that the planner manages.

I think that there can be conflicts of interests regarding a financial planner that earns a percentage of my portfolio. I would be more comfortable with a fee based financial planner advisor that charges me for financial advice by the hour and has nothing to gain from the advice he or she is giving me.

For me, a fee only financial planner is the only way to go. I know that Dave Ramsey offers some referrals under the heading of Dave Recommends and if you scroll down until

you reach endorsed local providers he will put you in touch with a personal financial advisor that he recommends.

They usually call you back within a day or so. Finding a financial planner this way is safer because Dave Ramsey has his reputation on the line and has a lot to lose if the person does not work out.

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