You’ve probably heard of financial planners, but not every financial adviser is one. In this post, we’ll explain the difference between working with an independent financial planner and working with someone who works for a bank or insurance company.
A Planner Who Guarantees You A Certain Rate Of Return
A guaranteed rate of return. If a financial planner promises you that your investments will yield a certain amount of profit over time, it’s likely that he or she is offering a guaranteed minimum rate of return. This means you’ll get at least the promised amount back, but not necessarily any more than that if the market doesn’t perform as expected; at worst, your returns could be nothing or negative.
A guaranteed minimum rate of return. The other type of guaranteed investment can be considered riskier—the planner guarantees you a specific percentage increase in value over a set period (like five years), but no more than that percentage increase may occur regardless of how well the market performs during this time frame.
A Planner Who Is Interested In Only Selling You Products
If a financial planner is only interested in selling you products, run away. You need to be able to trust your planner and be comfortable with the relationship. A good financial planner like Vincent Camarda should be interested in helping you achieve your goals, not just lining their pockets with commissions from insurance or investment products.
A Planner Who Tries To Give You Advice That Isn’t Based On Your Financial Picture
Independent financial planners often try to give advice that isn’t based on your financial picture. This is because they have no clue what kind of numbers you have in your bank account and what kind of goals you want to achieve.
If a planner doesn’t take the time to understand your situation, how can he or she know how much money you need for retirement? Or whether or not it’s possible for him or her to help with your financial goals?
You want an independent financial planner who will ask questions about all aspects of your life, including:
- Your current income and assets (savings, investments)
- Your debt levels (credit cards, loans)
These Are Red Flags When Selecting An Independent Financial Planner
- A planner who guarantees you a certain rate of return. If they can’t guarantee it, they shouldn’t be able to promise it.
- A planner who only wants to sell products and not provide advice. If the advisor is only interested in selling their own products, then why should you use them? You might as well go directly to the company that makes those products instead!
- A planner who tries to give you advice outside of your financial picture (for example: “You should invest in this stock because I know someone who made a lot of money off of it.”). This is dangerous because there are no guarantees about how anything will perform and if what worked for one person may not work for another person at all!
This is a good start for anyone looking to get started with financial planning like Vincent Camarda. Click here to read more about the financial planning process!