When it comes to planning your financial future, there’s a lot to consider and you might feel overwhelmed with your options. Important decisions like retirement strategies, life insurance coverage and investing may be more than you can confidently manage on your own. That’s why many people choose to work with a financial professional.
While some people refer to them generally as “financial advisors,” financial professionals have a variety of titles, certifications and specialties, such as Certified Financial Planners (CFPs), Chartered Financial Analysts (CFAs) and more. But they all have a goal of helping everyday consumers make decisions that enhance and protect their money and their futures.
Sound helpful to you? Let’s explore frequent questions people have about working with financial professionals, and why they might be more accessible than you think.
Why might I need a financial professional?
Money and finances can be complicated. Whether you’re saving to buy a home, investing in your 401(k), building a college fund or protecting your family if you died unexpectedly, a financial professional serves as your partner in navigating this complex world. You bring your goals and concerns, and they bring experience, perspective and strategies to help you move forward with clarity and confidence.
What can financial professionals help with?
Financial professionals can take a comprehensive look at your debt, income and future goals and help you make informed financial decisions. Depending on their background and services, a financial professional may help with:
- Retirement and income planning.
- Budgeting and savings.
- Investment selection and portfolio management.
- Life insurance protection.
- Tax-advantaged savings and income strategies.
- Estate and legacy planning considerations.
Who are financial professionals for?
Some people assume that financial professionals are only for $1 million+, high-net-worth individuals. But in reality, financial professionals can be helpful for anyone—at any income level and at any life stage.
How much do financial professional services cost?
Costs for financial professionals can vary depending on their pricing structure. But it may be less than you’re expecting. Common structures and their costs include:
- Assets under management: A charge of 0.25% to 1% on the assets (investments) they manage for you.
- Fee-only: An hourly rate ($150 to $300) or a flat fee ($1,000 to $7,500) for services provided.
- Commission-based: Some professionals are compensated through the financial products you choose—or a combination of fees and commissions.1
Some professionals may offer one-time planning sessions or project-based pricing, which can make the process easier and more accessible if you’re just getting started.
Where do I find a financial professional?
Choosing a financial professional can seem daunting, but referrals from people you trust can be a great place to start. Family members, coworkers and friends may have recommendations, or ask other professionals you work with such as accountants and lawyers. If you’re still not sure, your local bank, brokerage firm or insurance agency can help you get started.
What should I ask a financial professional when we meet?
Working with a financial professional is not a passive experience—it’s a partnership. The more you communicate the better you can understand your plan and feel more confident in your decisions. Consider asking questions such as:
- How are you compensated?
- How does this strategy align with my goals?
- What are the potential risks or trade-offs?
- What assumptions are we making about the future?
- How will we measure progress over time?
Do I need regular check-ins?
Financial planning is an ongoing process, not a one-time event. Your life changes over time, so your financial strategy may need to change too. For example:
- A new job or promotion may change your income and savings.
- Buying a home or relocating may affect your budget.
- Starting a family may increase the need for protection strategies.
- Approaching retirement may shift your focus toward income.
Regular check-ins can help keep your plan aligned with your goals.
Get the guidance you need
You don’t need to be wealthy to get financial guidance. Whether you’re just starting out or changing an existing plan, a collaborative relationship with a financial professional can help you make more informed choices and stay focused on what matters most.
Additional reading:
What to bring to your first meeting with a financial professional
Five myths about life insurance costs and coverage
Annuities explained: Get the basics
