How to Choose a Texas Financial Planning Partner

When it comes to reaching their financial goals and planning for retirement, many people try to manage their finances themselves and hope for the best. You may have considered consulting with a financial planner but aren’t sure exactly what one does or how to go about finding one. It can all feel a little intimidating – but it doesn’t have to be that way.

Financial planners can provide you with advice about all aspects of your finances and help you build a financial plan to meet your long- and short-term goals. They have the knowledge and experience you need to create a roadmap to financial security. You don’t have to be wealthy to benefit from the services of a financial planner – and it’s never too late to start.

What Does a Financial Planner Do?

A financial planner will help you determine your financial goals. He or she will develop a strategy to meet these goals based on your timeline and risk tolerance by carrying out a thorough needs assessment. Depending on your situation, you may need advice on some or all of the following:

Budgeting – Creating a budget that helps you meet your long- and short-term goals, such as buying a home or paying for college.
Debt management – Strategies for paying down debt and avoiding future debt.
Retirement planning – Creating a savings plan designed to make your money last throughout your retirement years.
Funeral and estate planning – Preplanning for what will occur in the event of your death.
Life insurance and long-term health insurance – Finding the best solutions to fit your needs and budget.
Tax planning – Maximizing deductions and minimizing taxes in retirement.

Financial planners offer a variety of products to meet these needs, including investments, designated retirement accounts, insurance policies, and annuities.

What to Expect When You Meet with a Financial Planner

When you first meet with a financial planner, you should expect to cover a range of topics. Your financial planner will want to become familiar with your lifestyle, your long- and short-term financial goals, and your concerns.

The first step will be to understand your current financial health. This will include a review of your current income, assets, debts and liabilities, and expenses. The financial planner will assess your future retirement income and pensions to project your retirement needs. He or she will review your current insurance coverage, including life, disability, and long-term care. The financial planner will also create a personalized plan based on your specific situation and recommend a course of action to close any gaps in your financial plan.

A good financial planner will take the time to educate you on the products he or she is recommending and gain your feedback to assess your understanding and comfort level with the recommendations. You are not obligated to follow a financial planner’s advice and should never feel pressured to do so. You should feel comfortable asking questions – after all, this is your money. You may need to meet with more than one financial planner before you find one that is the right fit for you. As this should be a long-term partnership, it’s important to find someone you trust and feel comfortable working with for years to come.

Once you have chosen someone and committed to a financial plan, your financial planner should meet with you regularly to review your progress and to update your goals if there have been any changes to your circumstances.

Questions You Should Ask a Financial Planner

What are your qualifications and credentials?
A Certified Financial Planner (CFP) has undergone extensive training and must stay informed through mandatory continuing education.

Are you a fiduciary?
Fiduciary financial advisors are required to keep your best interests in mind when making recommendations and must put your interests ahead of their own. Not all financial planners are fiduciaries.

What products and services do you offer?
Make sure they are the right fit for your needs.

How are you paid?
There are three common types of fee structures:

Fee Only – You pay an hourly rate or a percentage of the assets the financial advisor manages for you.
Fee Based – You pay a mix of commissions and fees. You pay a base fee but may also pay a commission on some trades of financial products.
Commission Based – You pay a commission based on the products the financial advisor sells you.