Leo Anzoleaga, Certified Mortgage Planning Specialist & Senior VP of Residential Lending, NEO Home Loans. NMLS ID #251882.
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Everyone has a financial goal—from saving for retirement to paying the monthly bills on time—but not everyone has a financial plan to get there. So when should you hire a financial planner?
Ultimately, the right time to hire a financial planner is when you are ready. Let's talk about what a financial planner does and common indications that it is time to bring in the expertise of a financial planner.
What Does A Financial Planner Do?
A financial planner helps you set milestones for your financial plan, navigate new and unexpected financial decisions, and manage your debts, assets and investments. They provide clarity about where you are now, where you want to be and ways to bridge that gap through goals-based planning and investing. Additionally, a financial planner has the training and objectivity to let you know if you are on track.
There are many financial planners in the United States, but for comprehensive financial planning, consider hiring a certified financial planner. A financial professional needs to have thousands of hours of experience and pass a rigorous exam before receiving their CFP certification.
CFPs advise clients on all facets of their financial picture, including real estate and investments. As a mortgage planning specialist, I work with CFPs to provide the numbers for the various scenarios that impact their clients as well as bring to light situations they haven’t considered. Before a purchase, a CFP helps the client put together a plan to diversify their assets and investments. This pre-purchase planning and advisement is critical because that is what helps dictate the steps we take during the real estate transaction.
While a client is in the process of purchasing a home, CFPs are also trusted guides. Many people think the mortgage is as simple as the rate and payment, but a CFP understands the broader implications and strategies of different mortgage options.
After a client closes, a CFP continues to work with the client on their financial plan, reviewing the mortgage on the liability side of the client’s balance sheet and having a resource like me to help advise for long-term management and strategies of that debt.
CFPs should also be fiduciaries, which are financial advisors who are legally and ethically bound to place the best interests of the client ahead of themselves or their firms. If a conflict of interest arises, a fiduciary is required to disclose it to you.
Not all financial advisors are CFPs or fiduciaries, such as stock brokers and insurance agents. There are times when you will need the expertise or services of these professionals, but when it comes to holistic, long-term financial planning, I recommend sticking with a CFP.
Signs That It’s Time To Hire A CFP
Many families handle their own financial planning thanks to technology and the prevalence of credible financial information online. A recent survey by Forbes Advisor and Prolific reported that 79% of millennials and Gen Z said they’ve received financial advice from social media. Platforms such as YouTube, Reddit and TikTok make financial information easy to access, search for and follow.
Despite having more financial information than ever before, people can still save time and gain peace of mind with a trained financial professional. Each person is different, but there are many common reasons you may engage a CFP. For example, maybe you have important financial priorities competing with one another, or you must make a life-altering financial decision.
Other signs it may be time to hire a CFP include (but are not limited to):
• You want to better understand the implications of your financial decisions.
• You just received an inheritance or a large sum of money.
• You want options for managing, minimizing or eliminating debt.
• You need expert advice on retirement planning.
• Your family dynamic has changed (marriage, divorce, children, etc.).
• You are approaching a major life transition (starting or selling a business, retirement, etc.).
• You need a financial plan to address a specific need (credit score, college funds, tax savings, diversifying your investment portfolio, etc.).
• You currently manage an estate or trust or will in the future.
• You need more nuanced advice than your robo-advisor or online tools currently provide.
• You have outgrown your do-it-yourself financial planning system or tools.
• You want a second opinion about your financial goals, strategies and plans.
• You want to identify financial opportunities or risks.
• You do not have time to manage your finances and want to outsource it to a professional.
Questions To Ask A Financial Planner
Initial consultations are great opportunities to ask financial planners how they could meet your financial needs. Examples of important questions to ask them include:
• Do you always act as a fiduciary or not?
• What is your fee structure, how are you compensated and what does that include?
• Do you have any disclosures of regulatory actions, arbitrations or complaints by FINRA or the SEC?
• How will you look at and advise on my financial matters regardless of how it compensates you?
• Tell me about your experience, credentials and qualifications.
• In what areas of financial planning do you specialize?
• What types of clients do you typically work with the best and have expertise with?
• How have you helped other people in similar situations?
• What is your process for helping clients like me, and what planning resources and tools do you use?
• Who will be my relationship manager on your team of advisors?
• How often will we communicate with each other and in what ways?
• How do you work with specialists and other subject matter experts?
• What are some other value-added services that you offer?
• Are you following similar advice and using similar investments in your own life?
The choice to hire a financial planner is a personal one. Evaluate your current financial situation and needs, write out your short- and long-term financial goals, and then decide whether a financial planner would help you more effectively close that gap.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
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