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Originally Posted by Bend it like Bourgeois
^^ you did answer in part, thanks.
A little context maybe - I have worked with a couple of people that were essentially mutual fund or insurance salespeople. And while they were good and trustworthy and all that I could never really figure out what they did for me, other than sell me stuff.
They have all had various pitches and workbooks to talk about my financial future but it always felt like a lead to a product. I think they honesty believe in what they sell and don't mean to suggest anything negative, it just never felt that valuable. Whatever wasn't product focused felt really basic. Save x percent of what you earn and diversify sorta stuff.
My perception is a 'real' financial planner would be different, but not sure what I expect by that. It might be I am just a cynic.
What kinds of things do you do that you get paid for that are not for selling a product? What can I get from working with a financial planner that I won't accomplish by following a couch potato strategy or something? I can guess tax or estate planning, for example, but that's where I was thinking if you don't have a million bucks or something (like every cper of course) you might spend more on the advice than you could ever save in taxes.
Does that make any sense?
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Unfortunately it makes sense because I've met a lot of planners in my travels. In complete honesty, the industry has some issues; we've allowed certain ways of doing business to become prevalent and many are better salesmen than they are actual financial advisors or planners. Part of the issue is qualifications, where some have a CFP, and others not only don't have it, but they have no intention of getting it. Then we have some 'captive' advisors who are precluded from using a lot of products. Or maybe they can use a lot, but literally don't get paid on those products. That leads to advisors pushing one particular brand or one company and not others.
So, in choosing an advisor you ought to find someone who has the education and experience for their profession. Having someone who is a butcher by day and financial advisor by night just seems foolish to me (no offense to butchers). Using an advisor who is independent is also critical in my eyes because they're not constrained to one solution for every problem/task. You should ask about their compensation and whether they have a bias of compensation from one company over another. Transparency in fees is coming, but I'm of the opinion that advisors should disclose fees to clients.
All of that being said, working with an advisor provides a number of benefits. Aside from the 'where do I invest?' or 'how much insurance do I need?' kinds of questions (which we should be able to answer), advisors can help you understand how all of this stuff works in the first place. We can explain all of your options and tell you the benefits and drawbacks of each as it pertains to your situation. We provide strategies for tax-savings, estate planning, retirement planning and cash flow planning as well. I help clients with their benefits plans, choosing retirement packages or retirement investments for their work pension plans. Sometimes I'm just another set of eyes to keep track of their investments and make sure they're performing as expected. Working with a 'good' advisor you can figure what you need to do to get to where you want to go. I'm not talking about a so called "financial plan" where they calculate that if you put away $100/month forever at a 7% rate of return you finish with X amount. That's child's play. Any advisor worth their salt can do much more for you and have a much more meaningful impact on your situation.
Anyway....this has sort of turned into a rant, and sorry for that! I hope it comes across as intended though, and doesn't make me sound upset or angry at all.