The decision to hire a financial professional to manage your investments can have a significant impact on your financial future as a couple. The goal of this post is to share the fundamentals of the considerations with linked directories of where you can find financial planners.
Your Financial Planner Should Prioritize Your Best Interest
An important factor to consider is whether the professional adheres to the fiduciary standard.Â
Whenever financial professionals work with clients, they must comply with either the fiduciary or suitability standards. The main difference between the two standards is the level of responsibility the financial professional has to act in their clients' best interests.
Fiduciary standards require financial professionals to act in the best interests of their clients at all times.
On the other hand, those only bound by the suitability standard are only required to provide suitable recommendations for their clients based on their financial needs, goals, and risk tolerance.
When making recommendations, the financial professional must consider the client's financial situation, investment objectives, and other factors. Still, they are not necessarily required to recommend the product or service in the client's best interests.
With that said, fee-only financial planners often naturally prioritize your best interest, as long as they are not offering commission-based products.
The lesson: choose a professional who must act in your best interests ahead of their own.
Certified Financial Planner Designation
Consider someone who holds a Certified Financial Planner (CFP®) designation, which indicates they have met rigorous education, examination, and experience requirements.
It's also beneficial to choose an advisor with experience working with couples and understanding the unique dynamics of managing finances together. Don't hesitate to ask potential advisors about their fee structures, investment philosophies, and how they tailor their services to fit your specific needs and goals.
Financial Therapists
A financial therapist is a certified professional who helps people manage their finances by combining financial planning and counseling. They focus on the psychological and emotional aspects of money management, and can help with:
Behavioral issues: Compulsive shopping, gambling, and overworking
Mental health: Underlying physical or mental health problems
Relationships: Money issues that cause rifts in relationships
Financial anxiety: Managing financial anxiety and developing healthier financial habits
Financial goals: Identifying and reaching financial goals
Financial therapists can help people understand their spending habits, improve financial communication, and address deep-seated beliefs about money. They can also help people adapt to new financial situations and address financial traumas.
Where to Find a Financial Professional
Research your professional financial professional
Pay Attention to Fees
The fees investors can pay make a significant difference in long term investment returns. Here is an example. As you can see from what has been highlighted at the bottom of the image, fees make a significant difference in returns.
Plug and play to see the difference fees can make using your own circumstances using this financial calculator.Â
Average financial advisor fees by type
10 Questions to Ask a Prospective Financial Advisor
Questions constructed by CFP
What are your qualifications and credentials?
What services do you offer?
Will you have a fiduciary duty to me?
What is your approach to financial planning?
What types of clients do you typically work with?
Will you be the only advisor working with me?
How will I pay for your services?
How much do you typically charge?
Do others stand to gain from the financial advice you give me?
Have you ever been publicly disciplined for any unlawful or unethical actions in your career?
Click here for a link to the details.
Wrapping it Up
I am not an investment advisor, nor do I want to be. I am however passionate about supporting couples who want to better manage money and the home as a team.
I hold an M.Ed., and am CPFFE®, Fair Play Certified®, AFC® Candidate, married since 2002 and am passionate about the importance of teamwork in marriage with two working spouses.Â
Click here to learn more about me and how I can help.