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A background check is an important part of evaluating a financial advisor or financial planner. A background check can tell you what industry licenses the advisor has and if there are any records of regulatory disciplinary action against that financial advisor or planner.

It’s important to note that the records kept by the regulatory agencies are not 100% perfect. If a lawsuit is settled against a financial advisor, the accusation won’t show up in the records. In addition, some of the information on registered investment advisors may be self-reported by the investment adviser themselves. So a “bad” advisor may not have any complaints, and a “good” advisor may have a frivolous complaint from an unhappy customer. Nevertheless, it is important to review the record. If the advisor has a pattern of problems or has lied about the licenses they have, it is best to steer clear.

There are several different regulatory agencies which keep records on financial advisors. Unfortunately, you need to check a different agency for different advisors and you may even need to check different places for the different licenses on the same advisor.

Continue reading ‘How to Do a Background Or Compliance Check on Your Financial Advisor Or Financial Planner’ »

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There are many of us who live under the impression that ‘only rich people need the services of planners.’ The reasoning is usually something to the effect that only such affluent people have money that is ’substantially enough’ to warrant the enlistment of the services of a professional to help in planning its expenditure! But this way of thinking is largely informed by a misunderstanding of what a financial planner really is, and what their role is all about.

A financial planner’s work is not all about helping people ‘plan how they will spend their money.’ In fact, strictly speaking, that is not even one of the things a planner does. A financial planner is, rather, a professional who helps people come up with good financial goals, and plans for the attainment of those goals. Planning how they will be spending their money may, of course, turn out to be a way in which a planner can help them towards the attainment of their goals, but that is by no means the main thing done by the financial planner. The work of the planner is about the identification of financial goals, and the definition of plans for the attainment of those goals.

Once you start viewing a financial planning as a professional who can help you formulate your financial goals and define plans for the attainment of those goals, it will instantly become clear to you that it is in fact people of modest means who need the services of the financial planners more. The assumption here is that the affluent people have attained most of their financial goals (hence their affluent status) – and whilst they still need the services of planners, in order to protect and keep their wealth, it is their humbler counterparts who need those services even more. Continue reading ‘How Modest Income Earners Can Benefit From The Services Of A Financial Planner’ »

Every financial planner will tell you that knowing your current net worth is the first fundamental step in the financial planning process. Taking stock of who you are and where you stand will help you to determine your financial goals and dreams and towards a realistic and practical financial plan.

You need to put down in paper all your current assets and liabilities to complete your net worth statement. Your current assets will include your home, bank accounts, saving accounts, real estate investments, stocks, bonds, cars, and everything else that you possessed. Your liabilities will include the mortgage on your home, real estate loans, car loans and any other debts you may have.

Why is this first step so important in financial planning? The two situations below will help to explain why carrying out this exercise is such an important aspect of the financial planning process:- Continue reading ‘Net Worth Statement – First Step in Financial Planning Process’ »