Building Wealth: How to Prepare for Working with a Financial Planner

Unfortunately, many people today don’t begin early enough to plan their retirements, nor do they fully grasp the principles of growing retirement income. This is due in part to the lack of reputable financial goals counseling. It’s not that there isn’t good investment advice out there, but payment to a consultant is usually involved if you want custom information. So, many people opt to go it alone, only to discover too late that they won’t have what they need to retire. That’s why it’s a good idea to use a financial professional to help you plan your retirement. And since it is your hard-earned money, you owe it to yourself to do some research first so you can ask informed questions of the financial advisor. Getting the lay of the land, financially speaking, will also save you money if your advisor charges an hourly rate.

Here are some of the subjects you should investigate before you hire a professional financial advisor:

How insurance impacts your financial future
Some people don’t need information on level term insurance and other forms of insurance protection because they don’t have anyone depending on them and causing them to need life insurance. But those who do need it should choose wisely. Understanding the difference between universal life, term life and variable universal life (VUL) will allow you to pick the option best for you. And let me give you one piece of information right out of the gate: cash value policies, such as whole life and universal life usually provide the worst return on investment and will often leave your loved ones with inadequate coverage. So you should bear that in mind when you talk to a consultant.

The difference between load and no-load mutual funds
Some financial consultants get commissions on sales instead of an hourly rate, so they only make money if they steer you toward “loaded” funds (funds with service fees). This is why it’s sometimes better to pay by the hour for financial consulting, so you can ensure the advice is objective. Once you understand the financial difference between no-load and loaded funds, you’ll see why.

Have an idea when you will retire and how much you’ll need to save
It’s a good idea to know approximately when you’ll retire and how much money it will take to maintain your lifestyle before you meet with a financial planner. That will help him form a plan.

Once you’ve done your homework, there’s just one more thing to do: make some inquiries of the people you know if they have any recommendations before you choose a financial planner. Once you have those recommendations, see if the candidates have built wealth in their own lives. If you don’t see evidence of that they did it for themselves, there’s no way they’ll be able to do it for you!