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Role Of A Financial Planner

Building your portfolio involves implementation of a financial plan. Some people may know how to go about it but most of us do not have a defined plan or know where to begin owing to the limited knowledge that we have. The sensible thing to do in such a case is to get in touch with a Financial Planner.

A Financial Planner is a certified professional who will holistically understand and evaluate your financial expectations and then create a financial plan which serves as a blueprint to achieve your desired financial goals by utilizing the finances at hand.


Knowing your Financial Planner

The first step is to sit down with a financial planner and get acquainted to him. Check with the planner and ascertain if he is CFP certified (Certification in Financial Planning). Get to know about his experience and his existing clientele. This will give you a fair idea about what the Planner has to offer and whether you will be comfortable entrusting him with your financial details. Also make sure that his service charges, commission-based or a percentage of your assets, are clearly stated and whether he will be working directly with you or will give that responsibility to an associate of his.

Above all, the main criteria when zeroing down on a Financial Planner is to ensure that his advice is geared towards serving your best interests and not inclined heavily towards his own profit.


What does a Financial Planner do?

Another way of phrasing the above question is, “What areas will a Financial Planner cover?” Not only is this query relevant, it is also of great strategic significance. Generally, the areas of your financial profile that a Planner manages are –

Apart from these client-centric areas, a Financial Planner also looks at managing client relationship. This is part of the holistic approach where a Financial Planner works towards understanding your intrinsic needs and aspirations and add a personal touch to the service rendered by him.


How does a financial planner work

Different Planners may have different approach for different clients and rightly so, as the expectations are always different. However, a very generic structure to a Financial Planning process can be as follows –

  •  Listening, understanding and evaluating your financial assets and the goals that you intend to achieve.
  • Preparing a comprehensive Financial Plan based on your financial profile and constraints as well as your expectations. This Plan is designed to work towards regulating your finances and achieving your goals in the short and long term.
  • Once this Plan is presented to you by your Planner, make sure to go through it thoroughly. Although it has been prepared keeping in mind the intended objectives, you may have queries about it. Clarify those queries before giving your Planner the consent to execute the Plan.
  • Monitor the Financial Plan on a periodic (monthly, quarterly, semi-annual or an annual) basis. Uncertainty in context of your finances is ever present and the age old adage fits perfectly here – “Hope for the best yet be prepared for the worst.” That is why it is important for the Planner to review the Financial Plan and alter it according to any changes in your financial profile.


Working as a Team

Your business relationship with a Financial Planner is based on ‘faith’ in his ability and ‘trust’ that he will do what’s best for you with your funds. So make sure that you select a Financial Planner who is not only your advisor, but also your guide in matters of finances.

At the same time, you should also ensure that you do not deviate from the Financial Plan devised so that it is able to meet the financial objectives that it sets out to achieve. This will reinforce the trust you have in your Financial Planner which in turn will motivate him to do his extra bit for you, his client.

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