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The Case for Financial Planners

You may have noticed that while I give you my take on options, and the advantages and disadvantages of various approaches, I do not outright tell you what to do. Something I’ve learned throughout the years is that everyone’s path to success is different. In fact, everyone’s definition of success is different as well. As such, any plans or steps you take in personal finance need to be unique to your situation. Certain tips or tricks can be applied to your situation, but their degree of relevance and impact is highly dependent on your situation.

This applies to several topics that I have previously written about:
▪ Using your credit to get free stuff, which you should not do if you have spending issues.
Prepaying your mortgage  based on your tax rate and risk appetite.
▪ What allocation you should use for your stocks based on your risk tolerance
▪ My take on early retirement.

Ultimately, your unique situation requires a unique plan. In the financial world there are two approaches to determining that plan.

The first option is to do what you’re doing now. Read and learn about personal finance. Peruse blogs in the personal finance world, subscribe to magazines like Forbes, and work your knowledge up to the level sufficient to your needs. The more you know the more you will be successful. Also, because you are completing the actions yourself you can ensure no one is taking advantage of you.

The Financial Planner Route

The second option is to hire a financial planner. As a do-it-yourself type person I am loath to ever consider such an option as I’ve developed the knowledge at this point to do it myself. I also wouldn’t trust such a person to have my best interest at heart anyway. That being said, to be 100% realistic this approach won’t work for many people. Finance has been a mix of my hobby and career for the better part of a decade, and not everyone has the patience or abilities to leverage the necessary steps to control their finances. Realizing this, I do want to say for those who might stumble on this blog who are not financially inclined, it’s ok to have a financial planner. Even if you read financial blogs to learn, it’s ok to leverage a planner and then use the knowledge you learn to check their work. After all I spend time learning about tax laws all the time for my financial benefit, but depending on how complex my current situation is, I still sometimes have a CPA due my taxes.

  1. To find a good financial planner:
    Look for someone who has a Certified Financial Planner accreditation. This will ensure the individual is regulated and has taken a minimum amount of classes. You can validate this accreditation on the CFP website. Remember this accreditation is only a minimum bar and does not necessarily mean the planner has your best interests at heart.
  2. You will also want to seek input from others whom have used this planner, either people you know personally or ask him/her to provide references. The preference would be to use people you know so they do not use only their best clients.
  3. Ask the planner if he will make a commission off certain investments.  This will allow you to check what situations might lead you to getting advice in their best interest rather than yours.
  4. How does the planner charge? Rates can happen in multiple ways.
    •  Some charge a flat rate. Honestly, this is the one that is least likely to get you into situations where the planner is not looking out for your best interests. Be sure you understand what you are getting included in this fee.
    • Some charge hourly. This is usually only a good deal if you’re a self starter. In that case, I would suggest only using the planner to get your feet off the ground and then switching back to self planning.
    •  Some charge a percentage of your holdings. This can be expensive, and I wouldn’t recommend it. They tend to only manage people with larger accounts given that drives their pay so you may not encounter these.
    • Some make a commission off the products they sell, this brings you back to question 3 and it’s ramifications
    • Some charge an annual retainer. This will work well if you need ongoing advice.
  5. In addition to the above, remember to ask about their experience and what type of planning you can expect to be provided. This will allow you to ensure they fit your needs.
  6. The final thing to ask is if they have any questions of you. If they haven’t asked you questions about your situation then run away. They are not interested in helping you. If they ask questions that do not reflect them having listened to your discussion, run away. The last thing you want is generic advice that may not fit your situation.

Have you ever used a financial planner? I personally have not, though at one point I explored a side hustle of acting as a financial planner.


  1. Mustard Seed Money
    Mustard Seed Money November 7, 2016

    I have not personally used a financial planner. I think taxes and investments are two things that people should personally learn how to do. There is so much good information out there that the consumer can use to make informed decisions today.

    That’s not to say financial planners aren’t useful but it’s not personally something that I choose to use at this time. Now if I won the lottery, I might feel different 🙂

      [email protected] November 7, 2016

      For myself even if I won the lottery I’d probably continue to do it because I enjoy it. Then again if I wasn’t here I actually suspect my family would be better off using a planner. Definitely the personal aspect of Personal Finance.

  2. Go Finance Yourself!
    Go Finance Yourself! November 9, 2016

    Interesting. I just recently wrote about my experiences talking with a financial planner who had called on me. In the end, talking with him helped me realize the value wasn’t there for the ongoing fee he would be charging me (1.5% of assets under management). Like you, I’m a DIY’er and have enough knowledge to plan and invest on my own. Even if you’re not like this, I still think paying 1.5% of your portfolio year in and year out is a waste. There’s a wealth of information readily available out there as well as free financial tools to get the job done yourself.

    That said, everyone has to decide for themselves where value is created for them. If you have a lot of money or a complicated financial situation, and absolutely no interest in personal finance and don’t mind trusting someone else with your portfolio, then perhaps the value is there year in and year out. For complete novices, I think there is value in a one time meeting with a financial planner to get you set up on the right track with follow up meetings when your situation changes significantly. Outside of that, I just don’t think the average person’s financial situation is changing that often to warrant yearly fees to a financial planner.

      [email protected] November 9, 2016

      I definitely agree 1.5% is too much. That being said there are all types of price points and levels of financial advice. It really depends on the type of advice you need and your level of comfort as to whether ongoing or one time would be the right solution.

  3. Jim @ Route To Retire
    Jim @ Route To Retire November 15, 2016

    I actually recently hired a financial planner a couple months ago, but it was more to get a second opinion on my game plan for financial independence. That’s one thing I don’t want to be wrong on! 🙂

    I negotiated a small fixed fee for the process based off of what I wanted ($1,000) and it was well worth it to know that we’re on the right track. He also gave me some tweaks to the plan, which were quite helpful.

    I will probably hire him again down the line to do the process once more a couple years before I quit the 9-5.

    — Jim

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