For those of you who find it difficult to manage your finances, then the right solution for you to use is to hire a financial planner. Everyone really needs to understand financial literacy. However, there are times when you need a financial planner to help you achieve the financial goals you have set.
However, nowadays many people are not familiar with this profession. Some of them even consider financial advisors to be the same as financial planners. In fact, the two have a few things that are different.
So, what exactly is a financial planner? What responsibilities do they have to accept? Well, in this article we will provide a complete explanation of financial planners, let’s read this article to the end.
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Understanding Financial Planner
In the past few months, there has been a lot of discussion about financial planners. Because many companies claim to be financial planners, but many clients report the company because it is considered suspicious.
Reporting from the official Investopedia website, a financial planner is an institution or person who has met the requirements to assist clients in achieving their financial goals. Meanwhile, as reported in SmartAsset, a financial planner is someone who focuses on financial planning to help clients achieve their final goals.
Based on the above definition, it can be concluded that financial planners have responsibilities to their clients, they can be in the form of individuals, institutions, or companies. They are tasked with providing consultation to clients to analyze objectives, risk tolerance, life, stages, and the appropriate type of investment.
Later, from the results of the analysis, the financial planner will provide program plans that are able to assist clients in achieving their financial goals. The trick is to diversify investments that will later provide income according to their goals.
The trick is to diversify investments that will provide income according to the client’s goals. In addition, as reported by the Business Insider page, good financial planners are those who will provide planning related to various aspects and the financial situation of their clients.
This includes planning investment strategies, taxes, retirement savings, small and large expenses, and housing planning. In general, they will provide general financial planning. However, there are also those who specialize in certain fields, such as planning for investment funds and pensions.
Responsibilities of Financial Planner
The various responsibilities that must be developed by them are as follows:
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Analyzing Client’s Goals and Characteristics
Each client certainly has its own goals and characteristics. For that, the first thing they really have to do is analyze the characteristics and goals of their clients. These two things will be the main reference in financial planning.
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Evaluating the Client’s Financial Condition
After successfully understanding the goals and characteristics of the client, they must be able to evaluate the client’s current financial condition. Some points that must be evaluated are assets, expenses, savings, income, installments, and various other needs.
From this, they will later find out what their clients have not been able to do so far.
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Financial Planner Must Make Financial Planning
Their main responsibility is to make financial planning for their clients. The plan must be adapted to the client’s current conditions and goals. That is, they must bridge the client’s current financial condition with the financial goals that the client will achieve.
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Submitting a Plan
After making a mature financial plan, they will describe the financial plan that has been made to the client. This stage cannot be carried out in one direction, but must be carried out in one direction.
For that, later a financial planner will ask the opinion and also the willingness of the client. If the plan is later deemed unsuitable by the client, then they can change the plan based on the feedback provided by the client.
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Help Execute the Plan
If the client has agreed to the plan that has been made by the financial planner, then it is time for the client to carry out the plan. At this point, a financial planner can help with several things related to the plan, such as opening a new account, managing assets, or other things needed by the client.
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Watching the Plan
When the financial plan has started running, then their responsibilities cannot just stop. They should be able to oversee the course of the plan. If in the middle of the road there is a problem, then they must help the client in overcoming the problem.
Financial Planner Type
Reporting from the Nerd Wallet page, there are three types of financial planners that you can choose according to your needs. The following are the three types of financial planners.
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Robo-advisors
If you plan to make simple financial planning, then you can take advantage of Robo-advisors. Robo-advisors are financial planners that have been managed automatically by utilizing computer algorithms. Planning will be adjusted to the financial goals that will be inputted by the client.
In general, the service costs that must be incurred by using these robo-advisors are lower than other financial planners.
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In-person financial planners
You can make in-person financial planners an option if you need more complicated financial planning or for a long period of time. Because in-person financial planners are able to provide plans that are in accordance with real-time conditions.
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Online financial planning services
Online financial planning services are a combination of human and robotic financial planners. You will get financial planning generated by computer algorithms. At the same time, you can also consult with a financial planner by phone, chat, email, or video call.
Required Certification
Basically, everyone has the same opportunity to become a financial planner. But, you already have to pocket a special certificate indicating that you are official or professional.
To become a financial planner, you must take the Certified Financial Planner (CFP) Professional Degree program. This certification is even international in scale and is issued by the Financial Planning Standard Board. In addition, this certification has also been recognized by the National Professional Certification Agency (BNSP).
The Importance of Financial Planning
There are many reasons why you should immediately plan your finances, some of the reasons are as follows:
- Protect you and your family from various possibilities and risks that will have a direct impact on your financial condition.
- By setting your priorities and abilities, you will be wiser in debt. So that the debt burden can be reduced.
- When your age is no longer productive and the necessities of life must continue, then you can rely on finances that have been planned in advance.
- Pay all expenses for the children’s future needs. One of the preparations that you must prepare is the cost of your child’s wedding. If you are able to prepare it from now on, then you don’t have to worry and be confused again later.
- Able to prepare all school fees for children up to undergraduate level. Some of you probably would not have thought that today’s children’s school fees are very expensive. If you can’t prepare it from now on, then you will definitely be in trouble.
- Buying vehicles and houses. Most of us would want to have the coveted house, it’s the same with a vehicle. By having the right financial planning, then you can fulfill your desires without having to burden your family.
- Passing on various forms of welfare to the next generation is a matter of pride. The best inheritance that you can give to your generation is not only wealth but also success in bringing your child to the best level of education.
- Pass on various prosperity to your next generation. Of course, it will be a matter of pride when you can leave the best during your life for your children and grandchildren. The best inheritance is not only in the form of wealth, but also success in bringing children to the best education level.